Binance halts USDC withdrawals – FUD continues

In an unexpected move, the world’s largest cryptocurrency exchange, Binance, has temporarily halted USDC (USD Coin) withdrawals. This news sent a few tremors through the crypto community but doesn’t seem to be very serious according to the exchange.

USDC is a stablecoin backed one-to-one by the U.S. dollar. It is one of the most popular stablecoins used as a medium of exchange in the crypto world. The decision to halt USDC withdrawals was made due to “technical difficulties”.

Changpeng Zhao, CEO of Binance tweeted:

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

The Binance CEO also tweeted out his belief that his exchange is receiving a huge amount of FUD. He expressed annoyance but said that in spite of the negativity Binance was still growing.

FUD helps us grow, even though they are thoroughly annoying.

You can FUD about someone without explicitly mentioning their name, which spreads awareness.

It also helps unite their supporters because it forms a common defense alliance.

Short thread. 1/4 https://t.co/PlxhqV5cZS

— CZ 🔶 Binance (@cz_binance) December 13, 2022

Opinion

The news of USDC withdrawals being halted does appear to have had far more negativity than would probably be the case normally. Up until very recently Binance was generally considered to be a model of stability in the crypto space, and it does seem a little odd that there is so much FUD being directed its way over recent days.

The crypto industry is in a vulnerable state, with the bear market extending for longer than many had anticipated. The FUD over Binance halting USDC withdrawals could be seen as a further sign that those wishing the sector ill might be trying to topple one of the biggest dominoes in the hope that this will bring crypto down for a long, long time to come.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.