In accordance with a declaration by cryptocurrency exchange behemoth Binance, Signature Bank will not execute transactions for customers of crypto exchanges that are less than $100,000.
As of February 1, 2023, Signature will no longer support “any of its crypto exchange customers with purchasing and selling sums of less than 100,000 USD,” according to a statement released by Binance. This would apply to “all Signature’s crypto exchange clients,” the statement added. Due to this, “certain individual users” might not be able to make modest SWIFT bank transfer transactions to buy or sell digital assets “with/for USD.”
Binance said that Signature Bank provided services to 0.01% of its typical monthly users and that it was actively looking for alternatives.” Users could continue using their accounts, the business added, including “purchasing and selling cryptocurrency using one of the supported credit or debit cards, other fiat currencies that Binance supports.
Financial services companies may transmit and receive information, including money transfer orders, rapidly and securely thanks to the SWIFT global messaging network. As a result of the ongoing fallout from the collapse of cryptocurrency exchange FTX and other industrial disasters, Signature, and other financial services companies have recently scaled back their involvement in the cryptocurrency markets.
A signature, one of Wall Street’s most crypto-friendly banks, announced in December that it will reduce the amount of money held in cryptocurrency-related deposits by $8 to $10 billion.
As of September 2022, nearly 23.5% of the $103 billion in total deposits made by the New York-based bank originated from the cryptocurrency sector. However, given the current “problems” in the market, Signature will eventually lower that percentage to around 15%, according to Signature CEO DePaolo, who spoke at a conference in New York organized by the investment bank Goldman Sachs.
Although the crypto exchange’s deposits with Signature made up less than 0.1% of the bank’s total deposits, FTX was one of the bank’s clients. Nevertheless, the partnership between the two led to an almost 20% decline in the share price for Signature in November.