Binance Partner Bank to Impose Restrictions on Cryptocurrency Transfers Under $100,000

One of the banks that manage fiat operations for Binance is imposing a restriction on cryptocurrency transfers below $100,000. The financial institution will be introducing a minimum transaction value to reduce its exposure to digital assets from February.

Bank Collaboration with Binance, Minimum Transaction of $100,000 for Crypto Traders

One of the banks that provide services to some of the customers of the world’s biggest cryptocurrency exchange, Binance, will only process transactions that exceed $100,000, with the new rule taking effect from the 1st of February. The decision to impose a minimum transaction value is part of the bank’s strategy to limit the risk associated with digital asset markets.

A statement shared with Bloomberg by Binance read: “One of our trustee banking partners, Signature Bank, has reported that it will no longer support any of its cryptocurrency exchange clients with buy and sell amounts less than $100,000 as of February 1, 2023. As a result, SWIFT bank transfers may not be available to certain users to purchase or sell cryptocurrency in USD amounts below USD 100,000.”

Retail customers of the exchange were informed that the company is looking for another partner for US dollar SWIFT transfers.

The spokesperson for the crypto firm reported that none of its other banking partners were affected by the change. Card payments and non-USD payments will remain unaffected.

The news arrives after New York-based Signature Bank declared in December that it will liquidate up to $10 billion worth of digital asset customer deposits when it withdraws from the crypto industry. This follows the filing of bankruptcy proceedings by one of Binance’s main competitors, FTX, due to liquidity issues in November.

Traditional financial establishments have been grappling with contagion fears during a tumultuous year in the crypto space. There have been numerous crashes and price plunges. Silvergate Capital, the parent company of Silvergate Bank based in California, experienced a 40% drop in its share prices after customers deposited over $8 billion worth of digital assets in the fourth quarter of 2022.

Signature’s shares were reported to have dropped by 64% last year. Their decision follows a warning issued by the US Federal Deposit Insurance Corporation (FDIC) concerning the risks associated with crypto assets.

What are your thoughts on Signature Bank’s decision to introduce a transaction minimum for crypto-related transfers? Share your opinion in the comments.