The prohibition is projected to have practically little of an effect on Binance's user base. Binance, the largest cryptocurrency exchange in the world, announced on Monday that effective of February 8 it will no longer receive anymore withdrawals or deposits from USD bank accounts. The company committed to working to restore the feature as soon as it is possible.
Why was it suspended？
The ban was notified by Binance via Twitter, although no specific reason for it was provided. It made it clear, though, that just a small percentage of its user base will be impacted by the pause. Credit cards, Apple Pay, Google Pay, and bank transfers using other fiat money, such euros, are all still valid ways to purchase and sell cryptocurrency on the exchange.
In a message to Bloomberg, a Binance representative said: “It's worth noting that just 0.01% of our monthly active customers use USD bank transfers, but that we are working hard to reinstate service as soon as possible.” Additionally, clients of Binance.US, the only business among the two authorized to provide services to users within the United States, are unaffected by the proposals. The business tweeted on Monday, “We are NOT suspending $USD withdrawals & deposits on February 8.”
Banks are reluctant to cooperate with cryptocurrency companies as a result of the bankruptcy of FTX, once Binance's biggest foreign rival, and government officials' cautions against this kind of alliances.
Regarding the news, Binance CEO Changpeng Zhao tweeted: “While some banks [are] removing support for crypto, other banks are moving in. ”Some setbacks were expected given the incidents of last year.“ Despite it having little effect on customers, CZ stated that the suspension of USD bank transfers is nevertheless a ”bad user experience.
Signature Bank
Binance said in January that one of its banking partners, Signature Bank, would stop supporting fiat to cryptocurrency exchanges for payments under $100,000. By stopping up to $10 billion in deposits from cryptocurrency clients, the institution hopes to lessen its commitment to the industry. The action was taken in response to the Federal Deposit Insurance Corporation's declaration that banking in the cryptocurrency sector should be regarded as a high-risk activity.
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