Bybit has suspended U.S. dollar deposits using bank transfer owing to a partner-triggered service outage, the Dubai-headquartered crypto exchange announced.
Bybit announced on its website that U.S. dollar wire transfers, including SWIFT payments, have been temporarily halted and withdrawals will be paused on March 10. Customers can use other means to purchase and withdraw cryptocurrencies.
The crypto exchange did not name the partner involved in suspending bank transfers.
Notice on Suspension of USD Payments via Bank Transfer
You may continue to make USD deposits via the Advcash Wallet, or buy cryptocurrencies with your credit card on our One-Click Buy page.
More details here: https://t.co/Roae3T4pYJ#Bybit #TheCryptoArk pic.twitter.com/XAUI2AeDJC
— Bybit (@Bybit_Official) March 4, 2023
Bybit Assures Customers Funds ‘Safe and Secure’
Bybit is one of the companies exposed to Genesis Global Trading, a cryptocurrency lender that filed for Chapter 11 bankruptcy earlier this week.
Bybit maintains that user funds are “safe and secure,” but advises clients who plan to withdraw USD to do it “as soon as possible” to avoid potential inconveniences.
Ben Zhou, the CEO of Bybit, said that its investment arm, Mirana Asset Management, has $150 million worth of exposure to Genesis.
Zhou stated that $120 million of the funds had been collateralized and liquidated. In addition, he emphasized that all customer assets are kept in separate accounts and Bybit’s earn products do not utilize Mirana.
The largest cryptocurrency exchange, Binance, announced last month that it would temporarily halt US dollar bank account deposits and withdrawals but promised to restore the service as soon as possible.
Payment Disruptions
Bybit’s decision coincides with the implosion of the crypto payments network run by the failing U.S. lender Silvergate Capital.
The 24-hour, real-time system was utilized by a variety of exchanges and investors, but it was halted on Friday, March 3 due to a “risk-based decision.”
The network was an important entry and exit point for USD in the U.S. crypto market.
After the catastrophic collapse of FTX in November 2022, regulatory constraints and market outflows are pressuring U.S. institutions to decrease their exposure to cryptocurrency assets.
Lawmakers have raised concerns about the lack of regulatory oversight for cryptocurrencies, which they argue creates opportunities for fraud, money laundering, and other criminal activities.
Crypto total market cap at $986 billion on the daily chart | Chart: TradingView.com
There have also been debates about whether to classify cryptocurrencies as securities or commodities, which would subject them to a range of regulatory requirements.
Despite these concerns, some lawmakers and regulators have also recognized the potential benefits of cryptocurrencies, including their potential to facilitate faster and cheaper cross-border transactions, promote financial inclusion, and provide an alternative store of value.
As the cryptocurrency market continues to evolve, policymakers are grappling with how to balance the potential benefits and risks of this new asset class.
-Featured image from Bitcoin.com News