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Binance noted that Signature Bank only services 0.01% of its monthly average users. The exchange also stated that its other banking partners were not impacted by Signature’s decision.
Cryptocurrency exchange Binance announced that its SWIFT partner Signature Bank will begin blocking USD transfers lesser than $100,000. Binance made this note in an email to its users on Jan 21st. The exchange quickly noted that multiple crypto exchanges using the bank were affected.
According to Bloomberg, Signature Bank is looking to reduce its exposure to the crypto market. Last year, the company’s shares fell by 64%, which may be due in part to contagion fears. Many believe that exposure to risky assets like cryptocurrencies makes companies unsafe. Similarly, the Silvergate Bank owned by Silvergate Capitals was affected.
Just this January, the Federal Deposit Insurance Corporation (FDIC) said:
“Business models focused on crypto-related activities or exposed to the crypto-asset market raise safety and soundness concerns.”
After the FTX Collapse, Signature Bank announced that it would drop up to $10 billion in deposits from cryptocurrency clients as it retreats from the industry. Blocking payments under $100,000 will affect many retail clients and significantly reduce the deposits to the bank.
Binance Reassures Clients despite Signature Bank Pullback
While the decision to disrupt payments didn’t come from Binance, Binance has recently stopped multiple withdrawals. In November, it temporarily suspended Solana-based USDT and USDC deposits. It also suspended Ether (ETH) and wrapped Ether (wETH) deposits and withdrawals around the Ethereum Merge.
To avoid similar interpretations, Binance has cleared the air, noting that other crypto companies received the notification from Signature Bank about its decision related to USD transfers. Also, it has stressed that its team is already searching for a new SWIFT partner. It stated:
“Our team is actively seeking a new SWIFT (USD) partner to avoid service disruptions.”
The exchange noted that Signature Bank only services 0.01% of its monthly average users. It also stated that its other banking partners were not impacted by Signature’s decision.
While USD direct bank transfers below $100,000 will not be possible, credit and debit card payments will be acceptable for buying and selling cryptocurrencies. It will also be possible to pay using other fiat currencies accepted by Binance, e.g. Euros. As alternatives, Binance will continue to support deposits and withdrawals from third-party exchanges. Again, the exchange’s peer-to-peer marketplace remains unaffected by Signature bank’s decision.