An unexpected ban! Binance’s banking partner no longer wants crypto-currency transfers under $100,000

Customers of one of the banks facilitating fiat transactions with Binance will not be able to trade crypto through SWIFT transfers of less than $100,000. This transaction minimum, which aims to reduce exposure to digital assets, will be introduced by the financial institution in February.

A bank working with Binance is setting a $100,000 minimum for crypto currency transactions.

A bank serving some of Binance’s clients will only process customer transactions exceeding $100,000, starting the first day of February. The new minimum will be imposed as part of the lender’s decision to limit its exposure to digital asset markets.

“One of our fiat banking partners, Signature Bank, has made it known that they will no longer support any of their crypto exchange customers with buy and sell amounts under $100,000 as of February 1, 2023. This is the case for all of their crypto exchange customers “, Binance said in a statement shared with Bloomberg on Saturday, elaborating:

As a result, some individual users may not be able to use SWIFT bank transfers to buy or sell crypto with/in USD for amounts less than USD100,000.

The measure affects retail traders whose accounts are managed by Signature, and the exchange has assured its customers that it is actively seeking a new partner for SWIFT transfers in USD. SWIFT is the most widely used global system for interbank transfers.

Only 0.01% of monthly Binance users are served by Signature Bank and no other banking partners are impacted, the crypto-currency company noted through a spokesperson. Card payments and transfers outside of the U.S. dollar will not be affected.

The news comes after New York-based Signature Bank revealed in December that it planned to get rid of $10 billion of customer deposits in digital assets to exit the crypto-currency business. The move was announced following the collapse of FTX, one of Binance’s main competitors, which filed for bankruptcy protection in November due to liquidity issues.

Traditional financial firms have been gripped by fears of contagion during a turbulent year for the crypto space, with prices falling and a number of crashes. Silvergate Capital, the parent company of California-based Silvergate Bank, which processes crypto-currency transactions, saw its shares lose 40 percent after customers withdrew more than $8 billion in digital asset deposits in Q4 2022.

Signature’s shares have fallen 64% in the past year, the report notes. Its decision comes after the U.S. Federal Deposit Insurance Corporation (FDIC) issued a warning about the risks associated with crypto-assets. Business models focused on crypto-related activities or exposed to the crypto-asset market raise safety and soundness concerns, the regulator said in a statement in early January