The world’s largest cryptocurrency exchange, Binance, temporarily suspended the withdrawal of USDC digital currency to customer accounts earlier today.
USDC repeated failures at adoption, being delisted on Binance and Circle failing to go public meant that coinbase had to come to the rescue. You can now swap USDT to USDC for free, But there is an issue: You can’t swap USDC to USDT for free on Coinbase—Stable-coins war returns.
The Company’s CEO, Changpeng ‘CZ’ Zhao said it’s “business as usual” as the crypto exchange is under stress by surging user withdrawals. A sudden net inflow of $1.5 billion digital assets somewhat alleviated the soaring outflows.
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Binance USDC withdrawals are temporarily paused, because the channel to swap from PAX/BUSD to USDC requires going through a bank in NY in USD. CZ said the situation will be restored when the banks open in a few hours. USDT and BUSD withdrawals are available and unaffected.
However, Binance has announced resumption of Withdrawal on USDC Trading Pairs.
$USDC withdrawals are back online. Thank you for your patience.
— Binance (@binance) December 13, 2022
CZ tweeted, It is important for Binance to maintain a level of transparency and trust with its users in order to foster a positive and productive trading environment, this is what CZ is doing.
On USDC, we have seen an increase in withdrawals. However, the channel to swap from PAX/BUSD to USDC requires going through a bank in NY in USD. The banks are not open for another few hours. We expect the situation will be restored when the banks open. 1/2
— CZ ? Binance (@cz_binance) December 13, 2022
That can be done with on-chain verifiable Proof of Reserves—customer and aggregate levels, then FULL audits on FIAT, debt, and verification no rehypoth goes on. That’s probably the best a CEX can do.
Binance outflows over last 12 hours, measured by DeFiLlama
Tether swapped $3b in Tron Tether for ERC20 Tether, which accounts for the net ERC20 USDT inflow; Most outflows are stables. Weird that (apparently) no USDC/SHIB/LINK has left wallets. Net stable outflows ~$4b.
Inflows in dollars— people are clearly offboarding en masse, ~$7B yesterday and today. Important to remember: if client deposits are backed 1:1, there’s nothing to worry about. Nonetheless, safest place to store funds is in self-custody wallets. 90%+ of Ethereum Binance flows is determined by USDC, USDT, BUSD, ETH and WBTC.
Despite lots of Binance FUDs, Wintermute Trading withdrew $153M $USDC from Coinbase and transferred $149.85M $USDC to Binance in the past 4 hours. This is not a daily operation of Wintermute, the last time he transferred $USDC to Binance was 20 days ago.
Justin Sun, withdrew 33,911,530 $BUSD and 15,432,715 $USDT from Binance 9 hours ago. Then he transferred 33,911,530 $BUSD to Paxos Treasury and exchanged 15,432,715 $USDT for 15,435,455 $USDC and transferred to Circle.
However, he made a $100M USD deposit on Binance via Tron Lend a situation Crypto Degenerate sees as manipulative.
I just deposited 100 million USD into @binance. ????????1???? https://t.co/tTCyiEBsXW
— H.E. Justin Sun ??? (@justinsuntron) December 13, 2022