Changpeng Zhao, CEO of Binance, explained that the exchange is seeing a surge in withdrawals of USDC, a cryptocurrency known as a stablecoin because it is pegged 1-to-1 to the US dollar.
“We have seen an increase in withdrawals. However, the channel to change from PAX/BUSD to USDC requires going through a bank in NY in USD. Banks don’t open for a few hours. We hope that the situation will be restored when the banks open,” Zhao said on her Twitter account.
“These are 1:1 conversions, with no margin or leverage. We will also try to establish smoother exchange channels in the future. In the meantime, feel free to withdraw any other stablecoins, BUSD, USDT, etc.,” he added.
The move came as investor concerns are mounting over Binance’s stability following the collapse of rival exchange FTX, CNBC reports.
Binance endured a wave of withdrawals on Monday amid concerns about its reserve test report. Net outflows, the difference between the value of assets entering and leaving the stock market, reached $902 million in the past 24 hours, according to data from blockchain intelligence platform Nanse, Coindesk published.
money laundering investigation
Binance is being investigated by the Justice Department (DOJfor its acronym in English) of the United States possible money laundering.
According to a report published exclusively by ‘Reuters’, the investigation has been ongoing since 2018 and at least half a dozen of the prosecutors involved in the case are in favor of taking an aggressive stance bringing criminal charges against the largest ‘exchange’ in the world and some of its highest officials, including the founder and CEO of Binance Changpeng Zhao. Others have refused to ask for time to review more evidence before defining their position, although everything indicates that they would join their colleagues.
The charges being investigated, they explain from ‘Reuters’, are unlicensed money transmission, money laundering conspiracy, and violation of criminal penalties, according to four people familiar with the case. The investigation involves prosecutors from three Justice Department offices: the Money Laundering and Asset Recovery Section, known as MLARS, the US Attorney’s Office for the Western District of Washington in Seattle, and the National Cryptosecurity Team. DOJ regulations state that money laundering charges against a financial institution must be approved by the director of MLARS. Ultimately, the Justice Department could file charges against Binance and its executives, negotiate a settlement, or close the case without taking any action.
It should be remembered that Binance is not registered in the United States. The US Bank Secrecy Act (BSA), designed to protect the US financial system from illicit finance, requires crypto exchanges such as Binance or FTX to register with the Treasury Department and comply with the requirements against money laundering if they conduct “substantial” business on US soil. According to a company blog post, almost a third of its users were based in the US in 2018year of its release.
Source: Ambito
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