Since Signature Bank is reducing its involvement in digital marketplaces. Consequently, Binance (the largest crypto exchange) said that the bank will only process customer transactions worth over $100,000. On Saturday, Binance issued an announcement to Bloomberg saying that one of its currency financial collaborators, Signature Bank, has informed them that they would no longer serve any of Binance’s cryptocurrency exchange users. Those who purchase and sell properties for less than $100,000 USD on February 1, 2023. All of their cryptocurrency trading partners face this issue. Therefore, certain customers may be unable to make transactions involving under 100,000 USD in cryptocurrency using SWIFT bank transfer.
Binance is unaffected by Signature Bank’s $8.1 billion in cryptocurrency deposit withdrawals. Spark Market Concerns
A representative for Binance has said that their other banking collaborators are unaffected. Financial institutions rely on SWIFT, a global messaging service, to send and receive money transfers, messages, and other important information.
Shares of conventional finance firms like Silvergate Capital and Signature fell the same amount or more than 40 percent after the financial institution reported that its clients had withdrawn nearly $8.1 billion in virtual deposits in the 4th quarter, raising worries of a market-wide spillover. Signature stock has dropped by 64% in the last year. In the aftermath of the FTX debacle, New York-based Signature announced in Dec that it planned to withdraw up to 10 billion U.S. dollars in funds from virtual currency customers.
FDIC Warning Prompts Signature Bank to Limit Binance Transactions: Binance Seeks Alternate Options
The Federal Deposit Insurance Corporation’s recent warning about the dangers of cryptocurrency is behind the change. FDIC is the principal US federal supervisor of state-chartered banks that don’t participate in the Federal Reserve System. Economic models that are centred in crypto-asset-related operations raise significant security and reliability concerns, the FDIC announced in a comment on January 5. But banks are not forbidden or stopped from providing banking services to almost any type or category of client.
In their statement, Binance promised to actively strive to find an alternate option. As well as the fact that 0.01% of the typical monthly consumers are handled by Signature Bank.
