Once a crypto-friendly bank, Signature is trying to reduce its exposure to the beleaguered digital asset market, increasing the transaction limits for crypto traders it supports
In the statement emailed to CoinDesk, the Binance crypto exchange notified that Signature Bank which serves 0.01% of its average monthly users would no longer support customers with buying and selling amounts of less than 100,000 USD as of February 1, 2023.
Therefore, some users might temporarily not be able to use SWIFT bank transfers to trade digital assets “with/for USD” for smaller amounts. Binance is currently looking for other financial alternatives that would substitute services provided by Signature Bank. At the same time, all users could continue trading from their accounts, “using credit or debit cards”, as well as “other fiat currencies supported by Binance.”
Although the policy update would affect a small percentage of Binance customers, the firm also states the same threshold would be true for “all Signature’s crypto exchange clients.” The move is an effort to reduce the bank’s significant involvement in crypto markets after the FTX’s bankruptcy shook the industry and affected many smaller firms in a domino effect.
Last December, Signature announced it would shrink its cryptocurrency-related deposits by $8 – $10 billion, in order to bring the share of deposits from digital assets to 15%-20% of its deposit base, and boost other business lines. Before the wave of crypto bankruptcies, nearly a quarter of the bank’s $103 billion in total deposits came from the crypto industry.
Not only did Signature Bank lose a significant profit from the crypto market decline but also its shares plunged about 20% in a few weeks since FTX was one of the bank’s minor clients. Year to date, the bank’s share price plummeted nearly 60% last November.
Despite the recent rise, boosted by the crypto market upheaval, SBNY stock remains at its lowest level within a year, losing another 18% between November 2022 – January 2023.