Top cryptocurrency exchanges Binance and Coinbase have temporarily suspended USDC conversions, adding to the panic in the crypto market.
The suspensions came after Circle, the issuer of USDC stablecoin, revealed that some of the cash reserves backing USDC remain held at Silicon Valley Bank, which was shut down by California’s financial regulator on Friday.
Binance suspended auto-conversion of USDC to BUSD, citing “current market conditions,” while Coinbase said it would suspend USDC conversion to USD while banks are closed over the weekend.
The collapse of Silicon Valley Bank has sent shockwaves across the tech industry, with several companies revealing their current exposure to the California bank, including Circle, Pantera, Avalanche, and bankrupt crypto firm BlockFi.
Circle also disclosed that $3.3 billion worth of the cash backing USDC remains locked in Silicon Valley Bank, which is one of six banks Circle uses for managing 25% of USDC reserves.