In accordance with Binance CEO Changpeng Zhao, the exchange needed to quickly pause processing USDC withdrawals because of insufficient USDC reserves on the platform. The pause was necessitated as a result of it needed to finish a token swap. Binance holds a big chunk of its stablecoin holdings, over $11.5 billion, in the Paxos-issued BUSD, a fiat-backed stablecoin founded by Binance and Paxos, in keeping with Nansen knowledge.

U.S officials have proven a particular interest in stablecoin regulation, particularly following the current Terra Luna crash. In Might, crypto markets went right into a freefall that led stablecoins TerraUSD (UST) to depeg from the dollar, which in turn, precipitated its linked cryptocurrency Luna to crash as properly. As of a consequence, many Terra and Luna traders noticed their investments vanish in a matter of days. Inside a few weeks of Terra’s downfall, the crypto market plunged once more and several crypto corporations announced layoffs and froze withdrawals to slash costs because of the excessive market conditions. Some companies like Three Arrows Capital and Celsius have since filed for bankruptcy.

As a result of they’re solely digital, cryptocurrency wallets (even when effectively-protected) are prone to a level of on-line interference. It’s not much different from having your checking account data saved online – it’s safe and also you may by no means expertise a breach, however the risk is at all times there. Blockchains are designed to be hack-resistant, but there’s still the potential of malware meddling in your crypto.