Binance has announced that one of its banking partners, Signature Bank, will no longer support any crypto exchange customers with buying and selling amounts of less than 100,000 USD as of February 1, 2023.
Binance, the world’s largest cryptocurrency exchange, has announced that Signature Bank will only handle user transactions of more than $100,000. This move comes as the bank looks to reduce its exposure to digital-asset markets.
Binance has announced that one of its banking partners, Signature Bank, will no longer support any crypto exchange customers with buying and selling amounts of less than 100,000 USD as of February 1, 2023. This will affect some individual users who will not be able to use SWIFT bank transfers to buy or sell crypto with/for USD for amounts less than 100,000 USD.
Binance has not been impacted by the SWIFT network outage, according to a spokesperson. SWIFT is a network used by financial institutions to transmit information and instructions.
Fears of contagion in the digital assets market have reached traditional finance companies such as Signature and Silvergate Capital. Signature's shares fell 64% last year after the bank disclosed that its customers withdrew about $8.1 billion of digital-asset deposits during the fourth quarter. Silvergate's shares have also tumbled, falling as much as 40% after the bank disclosed its own fourth-quarter digital-asset withdrawals.
In December, Signature announced that it plans to shed up to $10 billion in deposits from digital asset clients as it pulls back from the cryptocurrency industry in the wake of the FTX blowup. Based in New York, Signature said that this widespread pullback is necessary in order to protect its clients and business interests.
After the Federal Deposit Insurance Corporation warned of crypto-asset risks, banks are now shifting their stance on providing services to customers involved in the crypto-asset sector. The FDIC is the primary US federal regulator of banks that are chartered by the states that do not join the Federal Reserve System. While banking organizations are neither prohibited nor discouraged from providing banking services to customers of any specific class or type, business models that are concentrated in crypto-asset-related activities or have concentrated exposures to the crypto-asset sector raise significant safety and soundness concerns, FDIC said in a Jan. 5 statement.
Binance has stated that it is "actively working to find an alternative solution" to the current situation with Signature Bank. The company went on to say that "0.01% of our average monthly users are serviced by Signature Bank."
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