It is currently being widely reported that Binance has been cut off from the SWIFT (USD) system for transactions valued at less than US$100,000. Customers of the firm are reporting that an email communication was sent out earlier today notifying them of the change.
The expected limitation on SWIFT-related transactions is reportedly to be put into place as of February 1, 2023. After that time, all SWIFT (USD) fiat transactions must be of US$100,000 or larger in size in order for the crypto exchange to be able to facilitate the transaction.
The change reportedly follows a notification from the firms banking partner, with the change to impact “all of their crypto exchange clients,” suggesting that the SWIFT system itself may be moving to limit its use to access the crypto space.
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If it is in fact a change that will impact all banking partners, the contagion within the space might be fierce – Binance currently uses Signature Bank (NASDAQ: SBNY) for its fiat-related transactions, a common partner within the crypto space. Other major names that use Signature Bank are said to include Galaxy Digital, Bitstamp, Genesis Global, Nexo, OKCoin, Huobi Global, and many others – all of whom presumably would be impacted by the same such change.
Within the email, Binance outlined that their team is “actively seeking a new SWIFT (USD) partner to avoid any interruption of service.” Other functions of the exchange meanwhile are said to be unaffected.
So what does it mean in layman terms?
Users of Binance after February 1 will no longer be able to buy or sell crypto for US dollars in amounts of less than $100,000, with the email reportedly stating that other fiat currency transactions are still available, including Euros, with debit and credit cards still able to be used. Users wanting to buy or sell crypto in amounts less than $100,000 with or for fiat must use a third party exchange after the changes are implemented.
The changes are not said to impact corporate accounts.
While some users are questioning why transactions above US$100,000 are permitted, it is already being suggested that it is related to fraudulent transactions. As @cullend on Twitter puts it, “fraudulent $100k transfers are easy to spot.”
Meanwhile, other reports are surfacing that are suggesting the changes are not Binance-specific, but rather will apply to all crypto exchanges. @WallStreetPro on Twitter is reporting that the SWIFT system will no longer allow any fiat USD currency transactions to occur with a value of less than US$100,000, regardless of the exchange, with the user citing a report from AsiaMarkets.com. We were unable to confirm this rumour further however.
Binance has yet to place a notice of the reported changes on its website, or comment on it publicly.
Information for this briefing was found via Twitter and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
