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Binance Temporarily Suspends Deposits of USDC, USDT on Solana

Binance has yet to provide an explanation for the move, which has been mirrored by other major crypto exchanges.

3 min read
Circle's USDC and Tether's USDT are the largest stablecoins on the market. Image: Shutterstock.

Binance has announced that it temporarily suspended deposits of the stablecoins USDC and USDT on the Solana blockchain “until further notice.”

It has since reopened deposits for USDT on Solana.

USDT and USDC, created and managed by the companies Tether and Circle, are stablecoins pegged to the U.S. dollar, which exist on a wide variety of blockchains, including Solana and Ethereum.

Binance didn’t provide any explanation for why the decision was made. It isn’t the only crypto exchange to shutter withdrawals of the two leading stablecoins on the Solana blockchain. 

Rival exchange OKX announced earlier this week that it will be removing the two Solana-based versions of the stablecoins and that users won’t be able to deposit or withdraw the corresponding tokens in the future. 

Last week, Crypto.com announced in an email seen by Decrypt that deposits and withdrawals in USDT and USDC have been suspended on the Solana network, citing only “recent industry events.”

It’s important to note that these decisions would only impact users choosing to use the stablecoins via the Solana network. Users choosing to withdraw via networks such as Ethereum, Algorand, or Polygon, for example, would be unaffected. 

Like Binance, neither OKX nor Crypto.com provided a fleshed-out explanation of why the decisions came about. 

Expressing confusion about the move in a Tweet, the co-founder and CEO of Circle Jeremy Allaire said that “USDC on Solana is natively issued by Circle and is functioning fine.” 

He added: “Not clear what the motivations are for exchange actions, which are disappointing.”

Solana tanks amid FTX collapse

The Solana Foundation’s SOL tokens have recorded historically poor performance since the collapse of FTX last week prompted one of the most chaotic weeks in the cryptocurrency industry so far. 

Though almost all tokens took a major hit following FTX’s rapid slide into bankruptcy, Solana’s SOL token was hurt more than most. 

According to data from CoinGecko, the token’s value has fallen 94.9% from $259.96 to just $13.13 at the time of writing.

The token has also seen a dramatic fall from its recent peak of $38.03 on November 5, a day before Binance CEO Changpeng Zhao announced his intention to sell its holdings of  FTX’s FTT exchange tokens.

The Solana Foundation had a good deal of exposure to FTX too.

This exposure included $1 million worth of cash or equivalent assets on FTX, 3.24 million shares of FTX Trading LTD common stock, 3.43 million FTT tokens, and 134.54 million SRM tokens as of November 6. 

SRM tokens are proprietary exchange tokens of the Serum decentralized exchange.

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