World’s crypto exchange, Binance, announced that its fiat partner Signature Bank should no longer be processing transactions of less than $100,000. This development comes as the bank is looking to limit its exposure to the digital assets market.
Crypto banks have been facing huge operational challenges amid the current market turmoil following the collapse of the crypto exchange FTX. Crypto-focused Silvergate Bank recently reported a net loss of $1 billion. On the other hand, crypto bank Moonstone is announcing an exit from the crypto market.
As regulatory scrutiny and operational challenges in the space continue to grow, banks are distancing themselves further from the crypto sphere.
“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”.
However, Binance also noted that no other banking partners have been impacted. Binance said that there’s not a greater reason to worry since “0.01% of our average monthly users are serviced by Signature Bank”. The crypto exchange also noted that it’s “actively working to find an alternative solution”.
Last month in December 2022, New York-based Signature Bank announced that it intends to shed nearly $10 billion in deposits from digital assets clients. Amid the FTX blowup, Signature Bank is steering on a widespread pullback from the crypto space.
US federal regulator the Federal Deposit Insurance Corporation (FDIC) has also warned banking institutions over their exposure to digital assets. It is clear that the contagion fears in the crypto space are now reaching traditional banking institutions.
