Mark Tencaten - Binance halts U.S. dollar deposits and withdrawals

Beginning on February 8, Binance will temporarily halt all withdrawals and deposits made in US dollars. The well-known cryptocurrency exchange claims it is searching for a fix but has not provided a justification for the suspension. Only a small part of our users may be affected, the corporation said, and we are working hard to reinstate the services as quickly as possible.

It's important to remember that Binance.US is a separate organization and that it won't be impacted. American clients shouldn't be impacted because they are unable to use the global platform.

Binance stops deposits and withdrawals of US dollars

MarkTencaten says that any news that implies halting withdrawals should worry you if you utilize Binance. After FTX and other cryptocurrency platforms just collapsed, the crypto world is still on edge. FTX customer funds totaling billions of dollars are either lost or constrained by legal repercussions.

In an effort to reassure users, Changpeng Zhao, the CEO of Binance, better known as CZ, stated that only 0.01% of its active monthly users utilize U.S. dollar money transfers. However, it might be more comforting if the corporation was open about its decision. Even if there are just withdrawals in one currency, even the smallest indication of problems with customer money access raises red flags.

Mark Tencaten also states that Binance has previously also restricted deposits and withdrawals for specific currencies. Due to difficulties with the UK's Financial Conduct Authority, it was forced to cease British pound deposits and withdrawals for UK customers in the summer of 2021. Even though the service was later restored, the incident alarmed British cryptocurrency investors.

Since then, Binance has increased its compliance team and stepped up its anti-money trafficking and other anti-crime initiatives in an effort to maintain a positive relationship with regulators. Reuters claims that in December 2022, American officials were considering charging the exchange with money laundering. Binance told Fortune that its first goal is user privacy and that the Reuters report was "wildly outdated" and "incorrect."

How to guard your cryptocurrency holdings

Mark Tencaten says that the great news was that clients had time to get ready because Binance's decision to stop allowing withdrawals in dollars was announced beforehand. Additionally, it states that deposits and withdrawals made in other currencies will not be affected. The fact that American consumers who presumably do most U.S. transactions only can utilize the Binance.US platform which further contributes to the likelihood that the impact will be negligible.

However, it's crucial to use caution. especially given that the reason why Binance is limiting activity in U.S. dollars is unknown. Bloomberg speculates that it might be due to a problem with a particular financial partner, but there might be a more significant factor at work.

MarkTencaten suggests that switching your assets into a crypto wallet under your direct control is the only guaranteed way to safeguard them as a cryptocurrency investor. Non-custodial wallets are what they're called, and setting one up and being comfortable moving your funds around will require a little more crypto expertise. Don't forget your security phrase because you will be entirely responsible for ensuring its protection. Bitcoin (BTC) worth billions of dollars is locked up in crypto wallets that nobody can access because they've lost their password.

It makes sense that the desire to keep your cryptocurrency in a custodial wallet on the crypto platform where you purchased it exists, and there are benefits to doing so. To begin with, cryptocurrency exchanges are far more user-friendly. The costs are simple to comprehend. Additionally, if you forget your password, you may easily get it back. Finally, a lot of exchanges make it simple to stake your cryptocurrency and receive rewards.

 

According to Mark Tencaten, the major drawback is that there isn't any investment protection. You risk losing all of your money if an exchange's crypto assets fail since, unlike banks, they are not insured against failure. The major purpose of learning about non-custodial wallets is for this. Cryptocurrency stored in an independent crypto wallet won't be impacted if your exchange collapses, is compromised, or is forced to cease withdrawals for any reason.

It makes sense to investigate alternate methods of storing your cryptocurrency considering that one of the major benefits of cryptocurrencies is that you do not have to depend on centralized platforms.