Bybit halts USD bank transfers citing partner outages

March 4, 2023 admin Cryptocurrency News 0

Dubai-based crypto exchange Bybit has suspended United States dollar (USD) deposits via bank transfers in response to “service outages from a partner”. Funds can be withdrawn through wire transfers until March 10. 

In a blog post from March 4, the crypto firm said that “USD deposits via Wire Transfer (SWIFT) and Wire Transfer (For US bank) are no longer available.” As an alternative, users can continue to make USD deposits via the Advcash Wallet or with credit card.

Withdrawals through the Advcash Wallet are scheduled to be available soon, noted the exchange. Bybit claims user’s funds are “safe and secure”, but urges clients planning to withdraw USD to do so “as soon as possible to avoid potential disruptions.”

Bybit is one of the companies with exposure to the crypto lender Genesis Global Trading, which filed for Chapter 11 bankruptcy on Jan. 20.

According to Bybit CEO Ben Zhou, the exposure amounts to $150 million via its investment arm Mirana Asset Management. A total of $120 million of the funds were collateralized and had already been liquidated, according to Zhou. Moreover, he assured that all client funds go into separate accounts, and that Bybit’s earn products do not use Mirana.

The halt comes just a day after Silvergate bank announced plans to discontinue its digital assets’ payment network, claiming the termination is a “risk-based decision”. The network was one of the major on- and off-ramps for USD in the American crypto industry.

Regulatory pressure and market outflows following the dramatic collapse of cryptocurrency exchange FTX in November 2022 are driving U.S. banks to reduce their exposure to cryptocurrency assets.

Last month, Binance announced it would temporarily suspend bank transfers of US dollars. Previously, in January, the exchange said its SWIFT transfer partner, Signature Bank, would only process trades by users with USD bank accounts over $100,000. Signature Bank previously announced it was drastically decreasing crypto deposits.