Binance Temporarily Stops Support of USDC and USDT on Solana

Binance Temporarily Stops Support of USDC and USDT on Solana

21 November 2022

Users of Binance were informed that the USD Coin (USDC) and Tether (USDT) deposits on the Solana blockchain were temporarily suspended.

Stablecoins USDT by Tether and USDC by Circle are digital assets tied to the US dollar that are available on multiple networks, including Solana and Ethereum.

In its announcement, Binance did not explain the reasoning behind the decision. Withdrawals of the two most popular stablecoins on the Solana blockchain have been restricted by a few crypto exchanges now. 

The competitor exchange OKX revealed earlier that it would cease supporting the two stablecoins for Solana, thus preventing users from depositing or withdrawing Solana-based stablecoins. 

The week prior, reported that USDT and USDC deposits and withdrawals had been restricted on Solana, referring to the latest developments in the industry.

To clarify, only users who opt to use these coins on the Solana blockchain will be affected by these restrictions. Withdrawals made through Ethereum, Algorand, or Polygon, for instance, would not be impacted. 

In the same way as Binance, both exchanges didn’t explain the reasons for their actions. 

Commenting on the move on Twitter, Circle’s co-founder and CEO Jeremy Allaire said Solana-based USDC is natively issued and is operating correctly.

Crash of FTX Devastates Solana’s Price

The SOL token of the Solana Foundation has been struggling recently due to FTX’s collapse last week, which caused the cryptocurrency market to fall into chaos. 

With FTX going bankrupt, almost all coins were affected, but SOL suffered the most.

CoinMarketCap data shows that Solana’s price dropped by more than 90% — from $259.96 to just $13.5 at the time of writing.

A drastic decline has also been observed from the token’s recent peak of $38.03 on November 5, a day before Changpeng Zhao, the CEO of Binance, tweeted that the exchange plans to get rid of FTT tokens issued by FTX.

The Solana Foundation had a great deal of exposure to FTX as well.

As of November 6, the exposure consisted of $1 million of cash and equivalents on FTX, 3.24 million FTX Trading LTD shares, 3.43 million FTT tokens, and 134.54 million SRM tokens. 

SRM tokens represent the Serum decentralized exchange’s proprietary exchange tokens.

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