Binance CEO Changpeng ‘CZ’ Zhao said on March 10 that the exchange has no exposure to the embattled U.S. bank Silicon Valley Bank (SVB).
The disclosure had become necessary after reports emerged that some crypto banks like Circle and bankrupt lender BlockFi had exposure to the firm. According to CZ, Binance has no exposure to the bank, and its users’ funds were safe.
Binance Suspends USDC-BUSD Auto-Conversion
Meanwhile, Binance has suspended USD Coin (USDC) auto-conversion to its Binance USD (BUSD), citing current market conditions. The crypto exchange said it was witnessing high inflows that have increased the conversion burden. “This is a normal risk-management procedural step to take while we monitor the situation,” it added.
With this move, Binance joins a growing list of exchanges that have stopped supporting USDC conversions following its issues with SVB. Others on the list include Coinbase and Crypto.com.
While some within the community described USDC’s current situation as karma for its alleged role in BUSD’s earlier regulatory issue, CZ said he believes “[Circle] didn’t do anything to hurt BUSD. Anything that hurts one player hurts themselves.”
Is Changpeng Zhao Considering Buying a Bank?
Zhao hinted that he could consider buying banks following the recent issues with crypto-friendly banks. CZ tweeted a 2022 news story that stated that Binance was considering purchasing a bank. He said he is “not sure” if the time is suitable for the exchange to buy a bank.
Binance has made several investments in traditional institutions. In 2022, the firm made a $200 million strategic investment in the media firm Forbes. The crypto exchange also backed Elon Musk’s Twitter acquisition.
Meanwhile, Binance is not the only crypto exchange considering a foray into the traditional financial space. BeInCrypto previously reported that Kraken said it has intentions to open a bank. Crypto-friendly banks have come under scrutiny following FTX’s collapse. The recent failure of SVB and Silvergate has further increased the scrutiny of these institutions.
Main content of the article:
Binance CEO, Changpeng Zhao, has revealed that the exchange has no exposure to Silicon Valley Bank (SVB), following reports that crypto banks including Circle and BlockFi do. Zhao’s disclosure came after Binance suspended USD Coin (USDC) auto-conversion to its Binance USD (BUSD), citing market conditions and increased conversion burden. Several other exchanges, including Coinbase and Crypto.com, had already suspended USDC conversions. Zhao hinted that Binance could consider buying banks following issues with crypto-friendly banks, stating the exchange has made investments in traditional institutions such as Forbes. Other crypto exchanges, including Kraken, are also considering a foray into the traditional financial space.
