Bybit Pauses USD Deposits as US Crackdowns on Crypto Firms
The crypto exchange Bybit has paused US Dollar (USD) deposits due to “service outages” from partners. Is it the latest victim of Operation Choke Point?
Bybit exchange announced the suspension of USD payment via bank transfers and gave a deadline to withdraw USD by Mar. 10, 2023, 12 AM UTC. The exchange will terminate the USD withdrawal via Wire Transfer (including SWIFT).
However, the deposits will work through the Advcash wallet, and Bybit users can buy cryptocurrencies through credit cards.
Does Bybit Have Ties With Silvergate?
Bybit claims the suspension is due to “service outages” from the end-point processing partner. Coincidentally, Silvergate shut down the Silvergate Exchange Network (SEN) this Friday. SEN allowed traders to move USD between their bank accounts and exchanges as long as the exchange and the trader had accounts at Silvergate.
The community questions if Bybit used SEN for USD payments.
The Operation Choke Point
Before Bybit, Binance announced a temporary suspension of USD transfers on Feb. 8. After last year’s events, such as the collapse of FTX, Celsius, Voyager, etc., the US regulatory authorities have seemingly ignited operation Choke Point 2.0.
Operation Choke Point was a crackdown by the US regulators on “high-risk” companies in 2013. It was a rogue operation that cut down the banking access of the companies related to firearms, drugs, loans, etc. The Venture Capitalist Nic Carter believes the government has launched a similar crackdown on the crypto companies since Jan. 3.
On Jan. 3, the US regulators, including the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC), issued a joint statement to the banks. The report warned the banks with crypto exposure to align with “safe and sound banking practices.”
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BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.