Signature Bank’s new directive suggests that customers cannot use SWIFT bank transfers for transactions involving crypto exchanges and a value of less than $100,000.
Binance highlighted that they will still accept payments made through debit and credit cards and that bank transactions denominated in currencies other than the US dollar will be handled through the SWIFT network.
Binance Warned Binancians
As a precaution, Binance has warned its retail customers that a service failure could prevent incoming and outgoing bank payment transactions.
The crypto trading platform stated that the change was due to a “new banking partner.” It stated that the bank had limited its “crypto exchange clients'” access. No other cryptocurrency exchange has issued a comparable limitation as of this publishing.
Customers with U.S. dollar bank accounts who utilise the SWIFT payment system to buy or sell cryptocurrencies for less than $100,000 may experience a disruption in service due to an ongoing incident. On February 1st, the firm will implement these criteria.
However, on January 21, Bloomberg stated that Binance’s undisclosed financial partner was Signature bank.
Furthermore, the cryptocurrency exchange noted that SWIFT-based transactions would continue functioning for non-USD bank transfers, such as Euros.
Binance kept mentioning that users may still use credit or debit cards to buy or sell cryptocurrency and that payments to or from third-party exchanges would usually be completed.
Signature Bank has also announced plans to reduce its cryptocurrency holdings by up to $10 billion. Joe DePaolo, CEO of Signature Bank, reportedly stated that the Wall Street bank would decrease these deposits to fewer than 15% of total deposits.
U.S. financial regulators issued a warning on January 5, highlighting the dangers of cryptocurrency assets for financial institutions. The authorities have warned that corporations with heavy crypto holdings threaten financial stability. Additionally, they stated that issuing or retaining crypto assets as principal is “inconsistent” with sound banking procedures.