Binance temporarily halted withdrawals of stablecoin USDC as investor concerns mount after FTX collapse.

Binance, the world’s largest cryptocurrency exchange, has stopped issuing its USDC stablecoin

Tuesday as he conducts a “token swap.”

USDC withdrawals resumed about 8 hours after Binance first announced the cessation of withdrawals.

The move comes amid growing investor concerns about the stability of Binance following the collapse of the FTX exchange and reports of a US government criminal investigation. Binance said earlier Tuesday that it had temporarily stopped withdrawing USDC as it conducted a “token swap.” It involves exchanging one cryptocurrency for another without the need for fiat currency.

Changpeng Zhao, CEO of Binance, tweeted that the exchange sees an increase in the withdrawal of USDC, a cryptocurrency known as a stablecoin because it is pegged 1 to 1 to the US dollar.

. Investors use USDC to trade in various cryptocurrencies without the need to transfer funds in US dollars. If a customer withdraws USDC from Binance, it can be transferred to another platform. Zhao said that any transfer to USDC from the stablecoin known as PAX, as well as Binance’s BUSD token, requires routing through a New York-based bank that has not yet opened. Zhao’s advice is for users to convert their PAX and BUSD to USDC in order to withdraw their funds from Binance. The token exchange could be a way for Binance to get USDC quickly while banks are closed to resume withdrawals for customers.

Zhao said users can still withdraw virtual coins, including BUSD and tether. Deposits are not affected, he said.

Binance’s token is called BNB

fell to 5% on Tuesday morning, according to data from CoinGecko. It’s not always good news when a crypto company takes a break. Over the summer, crypto companies, including lender Celsius, will have to suspend withdrawals before finally filing for bankruptcy. There is no indication of such issues for Binance.

In the past 24 hours, Binance has seen $1.6 billion in outflows from its platform, according to a tweet from crypto data company Nansen sent early Tuesday. Binance has more than $60 billion in assets on its platform, Nansen said.

Investors panic

The failure of FTX and the arrest of the former president, Sam Bankman-Fried, has not made investors fear flying in the company. Binance has been in the spotlight since its decision to sell its self-issued FTT digital token FTX, which preceded the collapse of the exchange.

Investors have called for more transparency from Binance’s services. Last month, the company released a proof of deposit which it claims has a deposit rate of 101%. This means that it has enough assets to cover customer deposits. But critics said that the proof of reservation did not do enough to provide assurance about Binance’s promise. Mazars, the research firm used by Binance for its proof of deposit, said in its five-page report that the company “does not express any opinions or conclusions.”

Investors are also analyzing Reuters reports that prosecutors at the United States Department of Justice are delaying the end of a criminal investigation into Binance. Reuters, citing four people familiar with the matter, reported that the investigation focused on Binance’s compliance with anti-money laundering laws. Binance responded by saying, “Reuters got it again.”

“We have no idea about the inner workings of the US Department of Justice, and it would be inappropriate for us to comment if we did,” the agency said in a tweet on Monday.