Key Takeaways
- Signature Bank, will stop handling fiat-to-crypto transactions worth less than $100k from the 1st of February.
- Binance states that Signature Bank serviced only 0.01% of its average monthly users and that it was actively working to find an alternative solution.
World’s leading crypto exchange Binance has informed its users that it will ban USD transfers below $100K via the SWIFT payment system. Signature Bank will cease handling fiat-to-crypto transactions worth less than $100k from February 1st.
SWIFT-Society for Worldwide Interbank Financial Telecommunications is a major global member-owned cooperative that functions as a huge messaging system.
The crypto exchange added that Signature Bank serviced 0.01% of its average monthly users and that it was actively working to find an alternative solution. In an email sent to its users, Binance stated that they are “actively seeking” a new SWIFT (USD) partner to avoid service disruptions for future bank payment transfers.
“This is the case for all of their crypto exchange clients. Please be advised that until we are able to find an alternative solution, you may not be able to use your bank account to buy or sell crypto with USD via SWIFT with a value of less than $100,000 USD after February 1st, 2023”, Binance stated.
Binance added that SWIFT-based transfers would remain in operation for non-USD bank transfers, like Euro.
The latest move by the bank is viewed as part of its ongoing effort to decrease its exposure to the digital asset market. Signature Bank, which also offered financial services to the now-bankrupt FTX, made an important decision last month.
In early December 2022, the bank decided to reduce its deposits tied to crypto by $8 billion to $10 billion as a move to reduce its involvement in the digital asset sector. According to September 2022 analysis, around 23.5% of the bank’s total deposits came from the crypto industry, making it one of Wall street’s most crypto-friendly banks.
The crypto winter and stricter government regulation on crypto have affected Silvergate badly. Earlier this month, Silvergate Capital’s stock plunged 46% after the bank said it saw an outflow of $8.1 billion in digital-asset deposits during the fourth quarter(Q4).
