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0 CommentsBinance has resumed processing withdrawals of the USD Coin stablecoin (USDC) after pausing them for several hours earlier on Dec. 13. The exchange said it worked on a token swap to increase its USDC reserves.
On Dec. 13, the world’s largest crypto exchange Binance temporarily stopped processing USDC withdrawals due to inadequate USDC reserves on the platform, Binance CEO Changpeng Zhao said on Twitter.
According to Nansen data, Binance holds a large majority of its stablecoin holdings, more than $11.5 billion in Paxos-issued BUSD. To increase its USDC reserves, it made efforts to swap its BUSD holdings with USDC.
Meanwhile, any token swaps into USDC required routing funds through a New York bank which was not yet open, according to Zhao. This limited Binance’s ability to process these transactions, so the exchange temporarily paused USDC withdrawals while it conducted a token swap.
Dismissing the concerns of customers, Zhao encouraged users to “feel free to withdraw any other stablecoin.” Also, he noted that no margin or leverage is involved in the stablecoin conversions.
Later, USDT stablecoin issuer Tether announced that it’s assisting crypto exchange Binance with a “chain swap,” which involves converting 3 billion USDT to the Ethereum network from the Tron network.
“In a few minutes, Tether will coordinate with Binance to perform a chain swap, converting from Tron to Ethereum ERC20, for 3B USDT. The Tether total supply will not change during this process,” Tether said on Twitter.
Lately, users have been withdrawing large amounts of funds from Binance, including USDC and other stablecoins. According to estimates from The Block, Binance has seen a net outflow of over $2 billion in various crypto assets since Dec. 12.
Last month, following the FTX debacle, Binance revealed its -reserves, claiming that it holds more than $60 billion worth of assets in total. However, Binance’s Proof-of-Reserves system met criticism from Kraken’s CEO Jesse Powell and other crypto enthusiasts.
