Likely a lie for less savvy investors. Or they need cash to recapitalize before being able to transfer to wallets. Or people are withdrawing to fiat which would need a bank in many cases. My money is on it being a combination, but that they definitely don’t have reserves to cover a mass run on USDC.

Because the tokens aren't there. The web UI says they are but what's on the chain? You don't know because you don't have the keys. Hence my previous comment.