Binance To Suspend US Dollar Bank Transfers This Week (cnbc.com) 36
Binance, the world's largest cryptocurrency exchange, will suspend U.S. dollar deposits and withdrawals, the company said Monday, without providing a reason for the decision. CNBC reports: Binance US, a unit of the company that's regulated by the Treasury Department's Financial Crimes Enforcement Network, said in a tweet that it's not affected by the suspension. Thus the move applies only to non-U.S. customers who transfer money to or from bank accounts in dollars. Data from Arkham Intelligence shows that following the announcement, there was a sharp spike in outflows from Binance's crypto wallets, as millions of dollar-pegged stablecoins such as tether and USDC flowed to rival exchanges or individual wallets.
Binance's net U.S. dollar outflow was over $172 million for the day, based on data from DefiLlama. That represents a tiny amount of money for a company that has $42.2 billion worth of crypto assets, according to Arkham. "We're still overwhelmingly net-positive on net deposits," the spokesperson said. "Outflows always tick up when prices start to level off following a bullish market swing like we saw last week as some users take profits." Bitcoin rose more than 38% in January, its best month since October 2021.
Regarding Monday's suspension, a Binance representative told CNBC in an email that "Binance.US has its own banking partners and does not have any issues." The main Binance exchange does not serve U.S. users. Binance said customers can still use other fiat currencies or payment methods to purchase crypto. For the small number affected, "we'll have a new partner to announce for those users in the next couple weeks," the spokesperson said.
Binance's net U.S. dollar outflow was over $172 million for the day, based on data from DefiLlama. That represents a tiny amount of money for a company that has $42.2 billion worth of crypto assets, according to Arkham. "We're still overwhelmingly net-positive on net deposits," the spokesperson said. "Outflows always tick up when prices start to level off following a bullish market swing like we saw last week as some users take profits." Bitcoin rose more than 38% in January, its best month since October 2021.
Regarding Monday's suspension, a Binance representative told CNBC in an email that "Binance.US has its own banking partners and does not have any issues." The main Binance exchange does not serve U.S. users. Binance said customers can still use other fiat currencies or payment methods to purchase crypto. For the small number affected, "we'll have a new partner to announce for those users in the next couple weeks," the spokesperson said.
So no KYC then? (Score:3)
Does this mean Binance will stop the extremely intrusive KYC with its intense gathering of extremely detailed personally identifying information of non-US citizens, which I doubt they store particularly securely?
Because, ostensibly, the reason the crypto exchanges do KYC is to appease US Federal authorities. Not at all in an effort to make themselves look more credible, like respectable financial institutions. Right?
Binance won't even let you cancel and delete your account without you submitting to this process. Ie you start to sign up, get to the deep penetration of your personal and financial life, decide you don't want to go with Binance... but you can't log in to delete your account without it giving it to them... I wonder how many half set up accounts they have because of this? Inflating the numbers they can publish for Binance accounts much?
Re: So no KYC then? (Score:2)
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Binance pulled out of the US market in 2018. Whatever the main exchange requires in the firm of KYC is not there to placate American authorities. They will not knowingly serve American customers.
Liquidity (Score:4, Insightful)
Sure, it might have $42Billion in crypto assets, which makes $172million outflow seem like a “tiny amount”, but screw “crypto assets”, how much liquidity in US dollars does it have?
Assume the crypto assets are worthless to anyone else, how much can Binance actually pay out before becoming insolvent?
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how much can Binance actually pay out before becoming insolvent?
If you are a currency exchange refusing to pay out in the main currency the majority of your customers use then, sorry, you are already effectively insolvent.
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I suppose, if you think about this too narrowly.
The point of an exchange is to be a place to move currencies into other currencies, while the exchange pockets a tidy little profit. If an exchange starts refusing to do the work of exchanging, it is a business that is spiraling the drain.
Now, this could be a temporary issue that gets correct, of course. But it is a confidence shaking move that casts doubt on Binance's alleged core competence.
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And what do you think happens when a whole lot of Binance's clientele moves all their assets off their platform, because they've effectively made their platform useless to their clientele?
You think Binance may have some loans backed by the assets they're holding on to, which may become unsecured as those assets leave? You think that might cause some problems?
This is how a financial "institution" starts to crumble, right before the catastrophic collapse. They wouldn't be limiting cash exchanges if they wer
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Binance’s net U.S. dollar outflow was over $172 million for the day, based on data from DefiLlama. That represents a tiny amount of money for a company that has $42.2 billion worth of crypto assets, according to Arkham.
.... that could be all Bored Ape NFTs and animated JPEGs for all we know. "Crypto Assets" could literally be Monopoly money.
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It is monopoly money. Even so called "stablecoin" cryptos don't hold the equivalent in USD. That's why every now and again one of them comes crashing down.
The only reason they're used at all is it because it's an easy way to sidestep money laundering and other financial regs that transferring USD or setting up bank accounts might entail. At some point that will change.
Re: Liquidity (Score:1)
The just hold your crypto not dollars unless you deposit dollars to buy crypto. You sell crypto to another person for dollars and withdraw those funds.
From the comments it seems folks are misunderstamding what happens.
If no one wants your crypto no dollars you keep crypto.
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And do you think that crypto just stays there, completely ignored and untouched? No - the exchange is using the aggregate value of "assets under management" to secure loans and such for their own ongoing operations.
A currency exchange doesn't stop exchanging currency because everything is awesome. You seem to be misunderstanding that they are stopping their core business for non-US customers right now: exchanging one currency into another. And why would they be doing that? Do you think it might be becau
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I could go into business tomorrow selling a stablecoin. Let's call it CrapCoin. I say to everyone you can buy one CrapCoin in exchange for one dollar. So you give me 1000 dollars and I give you 1000 CrapCoins. When you want to redeem CrapCoin, I burn those CrapCoins and hand you back 1000 dollars via bank transfer or something. Simple. But that's assuming I just left your 1000 dollars in an account.
That ain't how these things work. That $1000 went off to buy other securities or secure loans which hopefully
Just go about your business (Score:3)
Nothing to see here [edgeforscholars.org]. Everything's fine.
Crypto Scam Collapses (Score:4, Interesting)
Re: Crypto Scam Collapses (Score:1)
Don't worry, there's still plenty of scams to separate fools from their currency.
On the small scale you've got stuff like "investing" in small bits of artwork...timeshares for Van Gogh but slightly less classy...and on the large scale you've got this carbon credit thing that they've been cooking up for the last 15 years or so.
And you know...the water out of my tap costs a few cents a gallon...and that same water only slightly more filtered costs 1.29 a gallon at the store....so there's that too. Coffee and
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SBF set them up the bomb! (Score:1)
From his parents home SBF was like : All your crypto are belong to us!
Massively Misleading Headline (Score:5, Informative)
FTA (emphasis added):
Binance will suspend U.S. dollar withdrawals and deposits for international customers beginning Feb. 8, the company said.
So US customers are unaffected, as are international customers using their native currency, this is just international customers using US dollars.
This smells like some sort of regulatory issue, like the DOJ investigating them for not doing enough to stop money laundering [slashdot.org].
I mean it will all still eventually end in tears, just not from this incident in particular.
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Binance has no US customers. They banned Americans from their platform years ago. Binance.us is a a separate entity that essentially licensed the name.
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That's not quite accurate. Binance said it's halting US dollar transfers. Its subsidiary, Binance US said it is unaffected. Binance US was founded because Binance is illegal in the US.
Remember, FTX and Binance etc had a Signal group (Score:2)
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Lol Binance nuked FTX to attempt a buyout. Or are you forgetting?
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You seem to not understand hostile takeovers.
How much in dollar payments? (Score:2)
What about Ecuador? (Score:2)
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"Crypto Assets" (Score:3)
That represents a tiny amount of money for a company that has $42.2 billion worth of crypto assets
So "nothing". How much do they have in actual cash when people try to claim back their totally real assets that are totally real?
Sounds like liquidity issues (Score:1)
Sounds like they can no longer borrow US dollars on leverage using their crypto "assets" as collateral, to cover withdrawal requests.