Bybit, a Dubai-based cryptocurrency exchange, halted USD deposits through bank transfers due to service outages from a partner. The suspension of wire transfers started on Mar. 4 and will end on Mar. 10, while withdrawals are still allowed during this period.
Bybit announced on their blog, notifying users that USD deposits through SWIFT and U.S. bank wire transfers are no longer possible. They recommend using Advcash Wallet or credit card for deposits, and promise withdrawals through Advcash Wallet will be possible soon. The exchange reassures users that their funds are secure but advises clients to withdraw USD quickly to avoid potential disruptions.
In another recent development, Silvergate Bank announced on Mar. 3 that it would discontinue its digital assets’ payment network. The bank claimed the decision was based on risk assessment. The network had been a major on- and off-ramp for USD in the U.S. crypto industry.
Regulatory Pressure and Market Outflows Drive U.S. Banks to Reduce Crypto Exposure
Bybit’s suspension of USD wire transfers is a response to U.S. banks’ efforts to limit their exposure to crypto assets following FTX’s collapse. Regulatory pressure and market outflows have driven banks to reduce their crypto exposure.
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In Feb, Binance temporarily suspended bank transfers of U.S. dollars. In Jan, Signature Bank, Binance’s SWIFT transfer partner, announced it would only process trades for users with USD bank accounts over $100,000. Signature Bank also reduced crypto deposits.
The suspension of USD wire transfers by Bybit highlights the challenges crypto exchanges and banks face amidst regulatory and market pressures. As the crypto industry faces increasing scrutiny, how institutions will adapt to the evolving landscape remains to be seen.
The author’s views are for reference only and shall not constitute investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing