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According to Binance CEO Changpeng Zhao, the alternate needed to temporarily pause processing USDC withdrawals because of inadequate USDC reserves on the platform. The pause was necessitated as a result of it needed to complete a token swap. Binance holds a major chunk of its stablecoin holdings, over $11.5 billion, in the Paxos-issued BUSD, a fiat-backed stablecoin based by Binance and Paxos, according to Nansen data.

U.S officials have shown a particular interest in stablecoin regulation, especially following the latest Terra Luna crash. In May, crypto markets went right into a freefall that led stablecoins TerraUSD (UST) to depeg from the greenback, which in flip, caused its linked cryptocurrency Luna to crash as well. As of a consequence, many Terra and Luna traders noticed their investments vanish in a matter of days. Inside just a few weeks of Terra’s downfall, the crypto market plunged once more and several crypto firms introduced layoffs and froze withdrawals to slash costs as a result of excessive market circumstances. 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 properly-protected) are susceptible to a stage of online interference. It’s not much totally different from having your bank account information stored online – it’s secure and also you would possibly by no means experience a breach, however the risk is always there. Blockchains are designed to be hack-resistant, yet there’s still the possibility of malware meddling in your crypto.