Binance, one of the world’s largest cryptocurrency exchanges, announced that New York-based Signature Bank will only handle transactions from its customers if it exceeds $100,000. The move comes as the bank reduces its exposure to digital asset markets. Accordingly, users may be required to use SWIFT bank transfers to buy or sell cryptocurrencies for amounts less than $100,000.
Signature Bank tightens rules for Binance transactions
Binance’s retail customer base has been notified of a possible upcoming service outage that could disrupt on- and off-ramp bank payment transfers.
The world’s largest crypto exchange described That this was the banking partner’s choice and that the adjustment would affect other trading platforms. This change applies to all users who trade cryptocurrencies.
Binance warned that users will only use their bank accounts to buy or sell cryptocurrencies with USD via SWIFT after February 1, 2023, only if they can find an alternative. However, SWIFT-based transfers will still be available for currencies other than the US dollar, such as the euro.
According to a Binance representative, no other banking partners are affected. Financial institutions use the SWIFT network to send information and orders.
However, Binance emphasized that users will continue to trade cryptocurrencies using credit or debit cards. Transactions will continue to be handled by or through third-party platforms.
The signing and shares of Silvergate Capital fell amid digital asset market concerns
Traditional financial institutions such as Signature Bank and Silvergate Capital are concerned about financial contagion in the market for digital assets. Its shares fell as much as 40 percent after the bank announced that its clients withdrew about $8.1 billion in digital asset deposits during the fourth quarter. Shares of Signature Bank have fallen 64% in the past year.
I After termination of FTXSignature Bank announced in December that it planned to withdraw up to $10 billion in deposits from clients holding digital assets as it began a general withdrawal from the cryptocurrency market.
gave The Federal Deposit Insurance Corporation (FDIC) warned. About the risks of crypto-assets, which prompted this adjustment. Banks chartered by US states that do not participate in the Federal Reserve System are primarily FDIC at the federal level.
In a statement on Jan. 5, the FDIC said that banking organizations are not prohibited or prevented from offering banking services to certain classes or types of customers. However, those whose business models are heavily focused on cryptocurrency-related activities or are industry-focused pose serious security concerns and reliability doubts.
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