Binance, OKX, BitMex and ByBit suspend Solana stablecoins

abdelaziz Fathi

At least five crypto exchanges wrote to customers today that all deposits and withdrawals for Tether’s USDT and Circle’s USDC have been suspended on the Solana network.

solana

As FTX fiasco continues to roil the broader space, major crypto platforms including Binance, OKX, BitMex and ByBit said the pause is effective immediately. The two stablecoins exist on many other blockchain networks, and the suspension only applies to users looking to move either asset on Solana. Binance’s email continued to say that stablecoin deposits in other ecosystems, including Ethereum and Cronos, would not be impacted.

In response, USDC issuer Circle assured users that its Solana-based stablecoin is operating as usual and there are no issues with issuing or redeeming the stablecoin. “USDC is always redeemable 1 for 1 for US dollars. Any amount. Any time. For Free. Always,” the firm added.

World’s largest stablecoin issuer, Tether also distanced itself from of the liquidity crisis that engulfed FTX and Alameda Research, saying they have no exposure to Samuel Bankman-Fried’s crypto empire. Tether’s CTO Paolo Ardoino posted a thread to explain the relationship between FTX and its USDT token to clear any fears and uncertainty among market players. He explained that Alameda has issued and redeemed a lot of USDT in the past, but they have no credit exposure that has matured with the struggling crypto trading firm.

Although these exchanges did not explain why they chose to suspend Solana transfers, the move comes amid one of the more chaotic weeks in crypto history. The drama reached an apex after Sam Bankman-Fried’s crypto empire filed for bankruptcy protection as it grapples with a liquidly crunch and customers’ huge withdrawals triggered by a run-on-the-bank-like crisis

Besides FTX’s woes, the bankrupt exchange and its founder also has deep ties with the Solana ecosystem. Bankman-Fried’s crypto trading arm, Alameda Research, invested $314 million in Solana’s development team.

Thus, alongside FTX’s native token, the price of SOL has also lost nearly two thirds of its marketcap as investors continue to scramble as a result of FTX’s collapse. At this point, the recent suspensions could be seen merely as precaution against the overexposure of FTX to Solana’s network, waiting for the situation to stabilize at least.

Solana is an open-source blockchain that is positioned as a competitor to Ethereum. It supports smart contracts, including non-fungible tokens (NFTs) and a variety of decentralized applications (dApps).

A large portion of SOL token, which provides network security through staking as well as a means of transferring value, is controlled by SBF’s Alameda Research and FTX.

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