Clients of one of the banks that facilitate fiat operations with Binance will not be able to exchange cryptocurrencies via SWIFT transfers of less than $100,000. The transaction minimum, intended to reduce exposure to digital assets, will be introduced by the financial institution in February.
Bank working with Binance sets $100,000 transaction minimum for cryptocurrency traders
A bank that serves some customers of the world’s largest cryptocurrency exchange, Binance, will only process customer transactions that exceed $100,000, starting on the first day of February. The new minimum will be imposed as part of the lender’s decision to limit its exposure to digital asset markets.
“One of our trustee banking partners, Signature Bank, has reported that it will no longer support any of its cryptocurrency exchange clients with buy and sell amounts less than $100,000 as of February 1, 2023. This is the case. of all your cryptocurrencies. exchange clients,” Binance said in a statement shared with Bloomberg on Saturday, explaining:
As a result, some individual users may not be able to use SWIFT bank transfers to buy or sell cryptocurrency with/for USD in amounts less than USD 100,000.
The move concerns retail merchants with accounts served by Signature and the exchange assured clients that it is actively seeking a new partner for US dollar SWIFT transfers. SWIFT is the most widely used global system for interbank transfers.
Only 0.01% of Binance’s monthly users are served by Signature Bank and no other banking partners are affected, the cryptocurrency company noted through a spokesperson. Card payments and non-USD transfers will not be affected.
The news comes after New York-based Signature Bank revealed in December that it plans to dump up to $10 billion in customer deposits of digital assets as it withdraws from the crypto industry. The move was announced after the collapse of FTX, one of Binance’s main competitors, which filed for bankruptcy in November amid liquidity problems.
Traditional financial firms have been gripped by contagion fears during a turbulent year for the crypto space, with falling prices and several crashes. Silvergate Capital, the parent company of California-based Silvergate Bank, which deals in crypto transactions, saw its shares lose 40% after customers withdrew more than $8 billion in digital asset deposits in the fourth quarter. of 2022.
Signature’s shares fell 64% last year, the report noted. His decision comes after the US Federal Deposit Insurance Corporation (FDIC) issued a warning about the risks associated with crypto assets. Business models focused on cryptocurrency-related activities or exposed to the crypto-asset market raise concerns about safety and soundness, the regulator said in a statement published in early January.
What do you think about Signature Bank’s decision to introduce a transaction minimum for cryptocurrency-related transfers? Let us know in the comments section.
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