Binance, the world's largest cryptocurrency exchange, has suspended withdrawals of the USDC stablecoin as investor concerns grow over the stability of the cryptocurrency exchange following the collapse of rival FTX and news of a potential criminal investigation by the US government.
Changpeng Zhao, CEO of Binance, tweeted on Tuesday that the exchange is seeing an increase in withdrawals of USDC, a cryptocurrency known as stablecoin because it is pegged one-to-one to the US dollar. USDC is used by investors to trade different cryptocurrencies without the need to transfer money into US dollars.
If traders are withdrawing USDCs from Binance, it could be to move them to another platform. Zhao said that any USDC exchange from the stablecoin known as PAX, as well as Binance's BUSD token, requires going through a New York-based bank that is not yet open. A token exchange could be a way for Binance to quickly get more USDC while banks are closed to resume withdrawals.