Binance Banking Partner Restricts Crypto Transactions to $100,000 and Above – Here’s Why
Binance, the world’s largest crypto exchange by trading volume, says it can no longer support USD deposits and withdrawals through SWIFT if the amount transferred is less than $100,000.
The reason for the new limitation, which sets the bar for such transfers extremely high for most ordinary crypto investors, is that one of Binance’s banking partners is said to be moving away from crypto.
Binance uses Signature Bank to process SWIFT payments.
SWIFT is an international payments system used to make transfers between banks in different countries.
“Actively seeking” new partner
Binance informed its clients of the new policy in an email sent out to affected users, where it also said that Signature Bank’s new policy will apply to all of its crypto clients. It added that it is “actively seeking” a new partner to process its SWIFT payments.
Only “0.01% of our average monthly users are serviced by Signature Bank,” the email pointed out.
Binance has so far not published information about the new policy on its website or on Twitter.
Signature Bank stepping away from crypto
According to a Bloomberg report from Sunday, Signature Bank set the $100,000 minimum limit in an effort to reduce its exposure to the crypto sector.
The bank, which is headquartered in New York, said back in December that it intends to reduce its exposure to clients operating in the crypto space by shedding about $10bn of deposits.
Along with Silvergate, Signature Bank has been known as one of the biggest crypto-friendly banks in the US.
The change in policy from Signature Bank came in the wake of the FTX collapse last year. It also followed a warning issued to banks from the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve (Fed), and Office of the Comptroller of the Currency (OCC) about risks in the crypto sector.
Among other things, the warning from the three regulators said:
“The events of the past year have been marked by significant volatility and the exposure of vulnerabilities in the crypto-asset sector. These events highlight a number of key risks associated with crypto-assets and crypto-asset sector participants that banking organizations should be aware of.”
Cryptonews.com has reached out to Signature Bank for a comment.