- Users in Binance will not be able to buy or sell crypto using SWIFT if the transaction is less than $100,000 this February 1
- Binance is “actively working” for an alternative solution to SWIFT transactions
- Signature Bank was found to impose the $100K restriction on the crypto exchange
Cryptocurrency exchange Binance announced in a January 21 email that users can no longer buy or sell crypto via SWIFT if the payment is less than $100,000. The new rule will take effect on February 1.
According to a recent report from Bloomberg, Binance’s banking partner, Signature Bank, was responsible for this new rule. Signature Bank can only manage more than $100,000 per user due to its distancing from crypto exposure.
“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 told Bloomberg News.
Binance added that the contrasting decisions between the exchange and Signature Bank would not affect its subsidiaries and other payment methods besides SWIFT. Users can still buy crypto with debit or credit cards, direct fiat transactions, or peer-to-peer transactions. The exchange is also working on “actively” finding the best alternative for clients who were used to SWIFT payments.
A spokesperson for Binance told reporters that its other banking partners would remain strong with the exchange. While the disruption between Binance and Signature Bank may seem like a heavy impact on the future of other exchanges, the spokesperson stated that only “0.01%” make up the Signature Bank users in the platform’s monthly activity.
Currently, only Binance has this situation. Other exchanges, such as Crypto.com, KuCoin, and Coinbase, continue with their usual operations.
Financial Organizations and Crypto Exchange Relationships Weakens
Following the events of crypto exchange FTX’s Chapter 11 bankruptcy in November last year, many financial partners started cutting ties with cryptocurrency. Established institutions, such as Mazars Group and Silvergate Capital, openly stated on their respective websites that they would stop their activities with crypto exchanges.
Today, Signature Bank joins the list of companies distancing themselves from Binance, Crypto.com, and Coinbase. Most of them fear a domino effect after FTX. FT.com says the banking partner wants $10 billion worth of crypto deposits off its vault. Joe DePaolo, CEO of Signature Bank, recently said that Wall Street would lessen crypto deposits to “less than 15%” of the overall deposits.
Meanwhile, Mazars Group could have elaborated more regarding its separation from its former partners, Binance and Crypto.com. Instead, it removed all its partnership posts from its website, following Binance’s lack of evidence for its “proof of reserves” last December.
Binance also had to deal with the regulators’ demands and prosecutors before establishing a US branch, particularly with the US Securities and Exchange Commission (SEC). It’s also worth noting that in 2021, Binance’s US entity, Binance US, entered into an agreement with the SEC to pay 10 million dollars and to register with the SEC as a broker-dealer to settle charges that it had operated an unregistered national securities exchange.
