Binance: Fast Money Loses SWIFT
Signature Bank is cutting off Binance and any of its crypto exchange customers from trading cryptos priced under $100,000 on the SWIFT and Signet trading systems. Having crypto speculators lose money and lose access to these networks could cut off crypto from much of its demand, further suppressing the dollar price of the cryptos and the exchanges which trade them. The FTX dominoes are falling.
Signature Bank is cutting off Binance and any of its crypto exchange customers from trading cryptos priced under $100,000 on the SWIFT and Signet trading systems. SWIFT is the Society for Worldwide Interbank Financial Telecommunication. It is basically the computer program that allows people to trade US dollars internationally. Signet is an internal trading program for Signature Bank customers.[1][2]
Per David Pan, writing Binance Says Signature Sets Transaction Minimum Amid Pullback, in Bloomberg on January 21,2023,[3]
“‘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,’ Binance said in a statement sent to Bloomberg News on Saturday.”
How much this will affect Binance and any of Signature Bank’s other crypto exchanges, such as Coinbase, is yet to be seen. Coinbase had been using Signature Bank’s Signet trading system to buy and sell cryptos for Signature Bank customers since October 2022.[4]
Journalist Steven Stradbrooke, in a January 18, 2023 article for Coin Geek entitled, Silvergate Capital loses $1 billion, Signature Bank’s Binance ties exposed, writes,[5]
“On Tuesday’s earnings call, Signature CEO DePaolo was asked about the Signet platform’s future. DePaolo said, ‘we’re not necessarily exiting client relationships there, but we are lower in concentrations there…ultimately, all we’re doing is limiting the amount that clients can maintain in overall deposits at our institution.’”
Concerning Binance, the Bloomberg article continues that Binance says that Signature bank is not a big part of their finances.
“Binance said it’s ‘actively working to find an alternative solution,’ in the statement. And that ‘0.01% of our average monthly users are serviced by Signature Bank.’”
So, even if Binance won’t be affected, as they seem to hope, having crypto speculators lose money and lose access to these network services could cut off crypto from much of its demand, further suppressing the dollar price of the cryptos and the exchanges which trade them. Sellers must have buyers.
However, as Steven Stradbrooke continues in his Coin Geek article,
“Silvergate Capital Corporation (NASDAQ: SI) lost $1 billion in the final quarter of 2022, while Signature Bank’s (NASDAQ: SBNY) undisclosed ties to the controversial Binance exchange could result in even greater damage.
On Tuesday, the California-based Silvergate reported a net loss of $1 billion in the three months ending December 31, 2022, a sharp turnaround from the $40.6 million profit Silvergate booked in Q3 2022 and the $18.4 million profit in Q4 2021.
The FTX dominoes are falling.
The Stradbrooke article continues,
Also releasing its Q4 results on Tuesday was New York-based Signature Bank, which reported a net income of $300.8 million, up from $272 million in Q4 2021. Signature’s shares have also tumbled from their November 2021 peak to around one-third of that value today but closed Tuesday up 2.4%.
Like its smaller rival Silvergate, Signature is ‘crypto friendly,’ with digital asset businesses accounting for nearly one-quarter of total deposits at the end of last September. But following FTX’s bankruptcy, CEO Joe DePaolo announced that the bank was “not just a crypto bank, and we want that to come across loud and clear.”
FTX was a Signature client, and SBF gave Signature a glowing testimonial last April. Regardless, FTX’s downfall led Signature to pledge to reduce crypto’s share of deposits to as little as 15% (and possibly even lower). The Q4 stats show digital asset deposits fell by $7.35 billion from the previous quarter, representing more than half the bank’s total Q4 deposit decline.”
Signature Bank is cutting off Binance and any of its crypto exchange customers from trading cryptos priced under $100,000 on the SWIFT and Signet trading systems. Having crypto speculators lose access to these networks could cut off crypto from much of its demand, further suppressing the dollar price of the cryptos and the exchanges which trade them. The FTX dominoes are falling.
[1]https://www.hamiltonmobley.com/blog/swift
[5]https://coingeek.com/silvergate-capital-loses-1-billion-signature-bank-binance-ties-exposed/