Binance, the world’s largest cryptocurrency exchange, said Tuesday it is pausing withdrawals of the stablecoin USDC while it carries out a “token swap.”
The move comes as investor concerns grow about Binance’s stability following the collapse of rival exchange FTX as well as a report of a potential criminal investigation from the U.S. government.
Binance said that it has “temporarily paused” USDC withdrawals while it does a “token swap.” This involves swapping one cryptocurrency for another without the need for fiat currency.
Changpeng Zhao, CEO of Binance, tweeted on Tuesday that the exchange is seeing an increase in withdrawals of USDC, a cryptocurrency known as a stablecoin because it is pegged one-to-one with the U.S. dollar.
USDC is used by investors to trade in and out of different cryptocurrencies without the need to move money back into U.S. dollars. If traders are withdrawing USDC from Binance, it could be to move it onto another platform.
Zhao said that any exchanges into USDC from the stablecoin known as PAX, as well as Binance’s own token BUSD, require routing through a bank based in New York which is not yet open.
A token swap could be a way for Binance to get more USDC quickly while the banks are closed in order to resume withdrawals.
Zhao said users could still withdraw other stablecoins including BUSD and tether.