Bybit Becomes Latest Crypto Exchange To Suspend USD Bank Transfers – What’s Happening?
Bybit, one of the largest cryptocurrency exchanges in the world, has announced the suspension of USD deposits via bank transfer due to “service disruption by a partner”.
“We have temporarily suspended USD deposits via bank transfer (including SWIFT) due to service disruptions from our endpoint processing partner until further notice,” the crypto exchange said in a Saturday announcement.
Bybit added that withdrawals via bank transfer (including SWIFT) will also be suspended from March 10, 2023, due to the same endpoint processing partner. “If you wish to withdraw via these methods, please do so before March 10, 2023 at 12:00 (midnight) UTC,” it said.
Other deposit or withdrawal methods remain operational, the exchange said, noting that users can buy cryptocurrencies with a credit card on the One-Click Buy site. The Dubai-based cryptocurrency exchange also said it would launch an Advcash wallet withdrawal service to speed up the user experience.
“Rest assured that the USD assets you hold in Bybit are safe and secure,” Bybit said. “Our platform has undergone strict security measures to ensure the safety of all user assets.” Bybit did not reveal the identity of the partner who experienced a power outage.
The halt comes just a day after troubled crypto bank Silvergate revealed plans to wind down its digital asset payment network, claiming the termination is a “risk-based decision”. The network was one of the major entry and exit ramps for USD in the US crypto industry.
It is worth noting that Binance, the world’s largest cryptocurrency exchange, has also made a similar announcement recently. In early February, the exchange said it was temporarily suspending US dollar withdrawals and deposits for international customers.
Banks try to reduce crypto exposure amid regulatory crackdown
The catastrophic collapse of cryptocurrency exchange FTX last year has drawn the ire of regulatory agencies in the US, pushing banks and other financial institutions to reassess their exposure to crypto and digital asset companies.
As reported, Moonstone Bank, a digital bank focused on serving high net worth individuals, revealed earlier this year that it is exiting the crypto space and will refocus on its “community bank” role. It cited recent developments in the industry and the subsequent increase in regulatory scrutiny as the reason for the decision.
“The change in strategy reflects the impact of recent events in the cryptoasset industry and the resulting changed regulatory environment relating to cryptoasset businesses,” Moonstone Bank said at the time.
Similarly, Signature Bank, which is a banking partner of Binance, has tried to reduce its exposure to crypto. Recently, the bank raised the transaction minimum for dollar transfers, announcing that it would only process trades from users with USD bank accounts over $100,000.
Meanwhile, earlier this week, Silvergate announced that it would not be able to file its annual 10-K financial report with the SEC on time and that it is evaluating its ability to remain in business. The bank saw an exodus of crypto companies following the announcement.
