Bybit Becomes Latest Crypto Exchange to Suspend USD Bank Transfers – What’s Going On?
Bybit, one of the largest cryptocurrency exchanges in the world, has announced the suspension of USD deposits via bank transfer due to “service outages at a partner”.
“We have temporarily suspended USD deposits via wire transfer (including SWIFT) until further notice due to service outages at our endpoint processing partner,” the crypto exchange said in an announcement on Saturday.
Bybit added that bank wire withdrawals (including SWIFT) will also be suspended starting March 10, 2023 due to the same endpoint processing partner. “If you wish to make withdrawals via these methods, please do so before March 10, 2023 00:00 (midnight) UTC,” it said.
Other deposit or withdrawal methods remain operational, the exchange said, noting that users can buy cryptocurrencies with credit cards on the One-Click Buy page. The Dubai-based cryptocurrency exchange also announced it would launch an Advcash wallet withdrawal service to speed up the user experience.
“Please rest assured that the USD assets you hold with Bybit are safe and secure,” Bybit said. “Our platform has undergone rigorous security measures to ensure the safety of all user funds.” Bybit has not disclosed the identity of the partner that experienced outages.
The disruption comes just a day after troubled crypto bank Silvergate announced plans to shut down its digital assets’ payments network, claiming the termination was a “risk-based decision.” The network has been one of the major ups and downs for USD in the American crypto industry.
It’s worth noting that Binance, the world’s largest cryptocurrency exchange, also recently made a similar announcement. In early February, the exchange announced that it was temporarily suspending US dollar withdrawals and deposits for international customers.
Banks seek to reduce crypto exposure amid regulatory crackdown
The catastrophic collapse of cryptocurrency exchange FTX last year has drawn the ire of regulators across the US, putting pressure on banks and other financial institutions to reconsider their exposure to crypto and digital asset companies.
As reported, Moonstone Bank, a digital bank focused on servicing high net worth individuals, announced earlier this year that it will exit the crypto space and refocus on the “community bank” role. He cited recent developments in the industry and the resulting increase in regulatory scrutiny as the reason for his decision.
“The change in strategy reflects the impact of recent events in the crypto asset industry and the resulting changed regulatory environment in relation to crypto asset businesses,” Moonstone Bank said at the time.
Similarly, Signature Bank, Binance’s banking partner, has sought to reduce its exposure to crypto. Just recently, the bank increased transaction minimums for dollar transfers and announced that it would only process trades from users with USD bank accounts over $100,000.
Meanwhile, Silvergate announced earlier this week that it would be unable to timely file its annual 10-K financial report with the SEC and that it was evaluating its ability to stay in business. The bank saw an exodus of crypto companies following the announcement.