Binance, the world’s largest cryptocurrency exchange, said Signature Bank will only handle user transactions of more than $100,000 as the bank decreases its exposure to digital-asset markets.
“One of our fiat banking partners, Signature Bank, has advised that it will no longer support any of its crypto exchange customers with buying and selling amounts of less than 100,000 USD as of 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 100,000 USD,” 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.
Contagion fears in the digital assets market have reached traditional finance companies such as Signature and Silvergate Capital, which saw its shares tumble as much as 40% after the bank disclosed its customers withdrew about $8.1 billion of digital-asset deposits during the fourth quarter. Signature’s shares fell 64% last year.
Signature, which is based in New York, said in December that it intended to shed as much as $10 billion in deposits from digital asset clients as it embarks on a widespread pullback from the cryptocurrency industry in the wake of the FTX blowup.
The shift comes after the Federal Deposit Insurance Corporation warned of crypto-asset risks. The FDIC is the primary US federal regulator of banks that are chartered by the 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 class or type, business models that are concentrated in crypto-asset-related activities or have concentrated exposures to the crypto-asset sector raise significant safety and soundness concerns, FDIC said in a Jan. 5 statement.
Binance said it’s “actively working to find an alternative solution,” in the statement. And that “0.01% of our average monthly users are serviced by Signature Bank.”