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

U.S officials have shown a particular curiosity in stablecoin regulation, particularly following the latest Terra Luna crash. In May, crypto markets went into a freefall that led stablecoins TerraUSD (UST) to depeg from the greenback, which in turn, brought about its linked cryptocurrency Luna to crash as effectively. As of a end result, many Terra and Luna traders saw their investments vanish in a matter of days. Inside a number of weeks of Terra’s downfall, the crypto market plunged again and several other crypto corporations announced layoffs and froze withdrawals to slash prices as a result of excessive market situations. Some companies like Three Arrows Capital and Celsius have since filed for bankruptcy.

Because they’re solely digital, cryptocurrency wallets (even when properly-protected) are susceptible to a level of online interference. It’s not a lot completely different from having your checking account information saved online – it’s safe and you might never experience a breach, but the chance is all the time there. Blockchains are designed to be hack-resistant, yet there’s still the potential of malware meddling in your crypto.