Binance, the world’s leading cryptocurrency exchange, resumed stablecoin USDC withdrawals about eight hours after it announced a pause in the service on December 13 while it carried out a “token swap.”
This token swap involves changing one cryptocurrency for another without the need for fiat currency. Changpeng Zhao, the CEO of Binance, tweeted that the exchange was seeing an increase in withdrawals of USDC because it is pegged one-to-one with the US dollar. Zhao said that any transfers into USDC from a stablecoin known as PAX, as well as Binance’s own BUSD token, require the routing of it through a bank based in New York, adding that the platform will also try to establish more fluid swap channels in the future.
At this point, things seem to have stabilized. Zhao tweeted on December 14 that yesterday was not the highest level of withdrawals Binance had processed – and not even in the top five.
According to data from OKLink, the amount of USDC on Binance increased from $1.26 billion to nearly $3 billion in nearly 24 hours, up nearly 139%, and now accounts for nearly 6% of the total assets on Binance.
The collapse of FTX and arrest of its former CEO Sam Bankman-Fried are shaking crypto investors’ confidence in the industry. Binance has been in the spotlight since its decision to sell its stake in FTX’s self-issued FTT digital tokens, which preceded the failure of the rival exchange.
Binance is in a regulation crisis due to a recent report by Reuters that US Department of Justice prosecutors are delaying the conclusion of a criminal investigation into Binance. Reuters, citing four people familiar with the matter, reported that the investigation, starting in 2018, is focused on the platform’s compliance with anti-money laundering laws. Binance responded, saying that “Reuters has it wrong again.”