According to a report by Bloomberg, crypto exchange Binance has announced that one of its fiat trading partners, Signature Bank, will no longer be processing transactions of less than $100,000 as the bank attempts to reduce its exposure to the cryptocurrency market.
Binance said this is a broad action affecting all crypto exchanges dealing with Signature bank. And that efforts are underway to find an alternative solution immediately for members of its user community whose accounts are serviced by this bank.
“One of our fiat banking partners, Signature Bank, has advised that it will no longer support any of its crypto exchange customers with buying and selling amounts of less than 100,000 USD as of February 1, 2023. This is the case for all of their crypto exchange clients. 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,” the statement sent by Binance to Bloomberg News on Saturday, said.
Signature Bank is one of the biggest fiat banking partners in the crypto industry in collaboration with many industrial giants, including Binance, Kraken, Coinbase, Circle and the now-bankrupt FTX exchange.
Following the heavy losses in the crypto market in 2022, Signature Bank lost about 64% of its shares (SBNY) value after paying out $8.1 billion worth of digital assets in service of withdrawal orders during the last quarter of the year.
To avoid similar losses in the future, Signature Bank has begun a massive withdrawal process from the cryptocurrency industry. To this effect, the New York-based bank even plans on voluntarily reducing its crypto deposits by $8 billion to $10 billion.
How Does Signature Bank’s Action Affect Binance Coin (BNB)?
Following the announcement of Signature Bank’s minimum transaction limit by Binance, there has been no significant effect on the BNB token. According to CoinMarketCap, BNB is trading at $302.89, having lost only 0.11% of its value in the last 24 hours.
BNBUSD trading at $303.0 | Source: BNBUSD Chart on Tradingview.com.
Ordinarily, BNB’s price movement is within the range of an expected reaction as Signature services only 0.01% of the average monthly customers on Binance. Thus, causing no need for panic among investors.
However, it may be too early to tell the full effects of Signature’s action on the BNB token, especially considering the ongoing social media rumors on Binance’s “true” relationship with the American banking giant.
Binance In Trouble?
Apparently, it is believed by some crypto enthusiasts that Binance has been dealing with Signature via an account belonging to “Key Vision Development Limited”, a Seychelles-based company that has been defunct since September 2021.
According to rumors, Signature Bank imposed a $100,000 minimum transaction limit on crypto transactions only after forcefully closing Binance’s “phony” account. Some also say that Binance is the only exchange affected by this new transaction limit policy, especially since there have been no official statements from other crypto exchange clients of Signature bank.
That said, it is worth stating that all these statements are still rumors with no confirmation by any credible authority. However, Binance users as well as BNB investors, are advised to watch out for any developments in that space.
Featured Image: Reuters, Chart from Tradingview.com