Signature Bank withdraws from crypto trades below $100,000: Binance

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Binance, the world’s largest cryptocurrency exchange, said Signature Bank will only process user transactions over $100,000 as the bank reduces its exposure to digital asset markets.

“One of our fiduciary banking partners, Signature Bank, has indicated that it will no longer support any of its crypto exchange clients with buy and sell amounts below USD 100,000 effective February 1, 2023. This is the case for all of their crypto exchange clients. As a result, some individual users may not be able to use SWIFT bank transfers to buy or sell crypto with/for USD for amounts less than USD 100,000,” Binance said in a statement sent to Bloomberg News on Saturday. .

No other banking partners are impacted, a Binance spokesperson said. SWIFT is a network used by financial institutions to transmit information and instructions.

Fears of contagion in the digital asset market have reached traditional financial firms such as Signature and Silvergate Capital, which have seen their shares plummet by up to 40% after the bank revealed its customers withdrew around 8.1 billion dollars of digital asset deposits during the fourth quarter. Signature shares fell 64% last year.

Signature, which is based in New York, said in December that it intended to remove up to $10 billion in customer deposits of digital assets as it embarks on a widespread withdrawal from the cryptocurrency industry following the FTX explosion.

The change comes after the Federal Deposit Insurance Corporation warned of the risks associated with crypto-assets. The FDIC is the primary U.S. federal regulator of banks that are licensed by states that do not join the Federal Reserve System. While banking organizations are neither prohibited nor discouraged from providing banking services to customers of any specific category or type, business models that focus on crypto-asset related business or have Concentrated exposures to the crypto-asset sector raise significant security and soundness concerns, FDIC said in a Jan. 5 statement.

Binance said it was “actively working to find an alternative solution,” in the statement. And that “0.01% of our average monthly users are served by Signature Bank”.

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