Bybit Becomes Latest Crypto Exchange to Suspend USD Bank Transfers – What’s Going On?

Bybit, one of the largest cryptocurrency exchanges in the world, has announced the suspension of USD deposits via bank transfer due to “service outages from a partner.”

“We have temporarily suspended USD deposits via Wire Transfer (including SWIFT) due to service outages from our end-point processing partner until further notice,” the crypto exchange said in a Saturday announcement.

Bybit added that withdrawals via Wire Transfer (including SWIFT) will also be suspended starting Mar 10, 2023, due to the same end-point processing partner. “If you wish to make any withdrawals via these methods, please do so before Mar 10, 2023, 12AM (midnight) UTC,” it stated. 

Other deposit or withdrawal methods remain operational, the exchange said, noting that users can buy cryptocurrencies with credit cards on the One-Click Buy page. The Dubai-based cryptocurrency exchange also said it would launch an Advcash wallet withdrawal service to expedite the user experience. 

“Please rest assured that the USD assets you hold in Bybit are safe and secure,” Bybit said. “Our platform has undergone strict security measures to ensure the safety of all user funds.” Bybit did not disclose the identity of the partner experiencing outages.

The halt comes just a day after troubled crypto bank Silvergate revealed plans to discontinue its digital assets’ payment network, claiming the termination is a “risk-based decision”. The network was one of the major on- and off-ramps for USD in the American crypto industry.

It is worth noting that Binance, the world’s largest cryptocurrency exchange, has also made a similar announcement recently. In early February, the exchange said that it is temporarily suspending U.S. dollar withdrawals and deposits for international customers.

Banks Try to Reduce Crypto Exposure amid Regulatory Crackdown

The catastrophic collapse of cryptocurrency exchange FTX last year has attracted the ire of regulatory agencies in the US, pressuring banks and other financial institutions to reconsider their exposure to crypto and digital asset companies. 

As reported, Moonstone Bank, a digital bank focused on serving high-net-worth individuals, revealed earlier this year that it is exiting the crypto space and will be refocusing on the “community bank” role. It cited the recent developments in the industry and the subsequent rise in regulatory scrutiny as the reason for its decision. 

“The change in strategy reflects the impact of recent events in the crypto assets industry and the resultant changing regulatory environment relating to crypto asset businesses,” Moonstone Bank said at the time. 

Similarly, Signature Bank, which is the banking partner for Binance, has been seeking to reduce its exposure to crypto. Just recently, the bank raised transaction minimums for dollar transfers, announcing that it would only process trades by users with USD bank accounts over $100,000. 

Meanwhile, earlier this week, Silvergate announced that it would not be able to file its annual 10-K financial report to the SEC on time and that it is evaluating its ability to stay in business. The bank saw an exodus of crypto companies following the announcement.