Binance’s banking partner SWIFT has decided to stop USD wire transfers below $100K. The termination of bank payment transfers will go into effect on 1 February.
The news was released by Binance on 21 January in the form of a letter, where the exchange platform stressed that it is looking for a new SWIFT (USD) partner to avoid this type of disruption.
Binance: the ban on transfers via SWIFT payment system
Retail customers of Binance have now been informed, the SWIFT payment service is discontinuing a certain type of bank payment transfers.
However, the world’s largest exchange platform wanted to specify that credit and debit card payments will continue to be accepted. The same is true for non-USD bank transfers, which will be processed through the SWIFT payment system.
SWIFT is a global messaging network that enables financial services companies to send and receive money transfer instructions and other information quickly and securely.
It all began with Binance’s communication to its users. The exchange platform alerted its customers that the services of Signet Bank have imposed a transaction limit for SWIFT payments, at $100,000. Binance’s announcement also explained that the decision was not made directly by SWIFT, but rather by the banking partner it relied on for this type of payment.
“Dear Binanciano, We are writing to tell you about a change that may impact the Binance services you use. What is happening? The banking partner that services our accounts has indicated to us that they will no longer be able to process SWIFT transfers for individuals that are less than $100,000, effective February 1, 2023. This will apply to all crypto exchange clients [and therefore not just Binance, NDR].
Until we are able to find an alternative, you may not be able to use your bank account to buy or sell crypto for values under $100,000 starting Feb. 1, 2023.”
Unfortunately until this issue is resolved, this disruption will impact everyone who is trying to buy or sell crypto, for less than $100,000, through SWIFT.
However, Changpeng Zhao’s platform has been trying to reassure its users, explaining that this change will not affect its corporate accounts.
But why this move?
According to Bloomberg reports, the banking partner involved, namely Signature Bank, decided to set the minimum transaction limit so high in order to reduce its exposure to the digital asset market.
It is therefore clear that Binance is not involved in this operation; the platform is exempt from the decision.
In recent weeks, Signature and other financial services companies have scaled back their involvement in the cryptocurrency markets, partly due to the ongoing fallout from the implosion of the FTX exchange and other industry debacles.
Binance said that 0.01% of our average monthly users were served by Signature Bank and that it is actively working to find an alternative solution.
As of 2 February, Binance will also set limits on NFTs
As of 2 February, Binance has decided to remove all NFTs with average daily volumes of less than $1,000 from the platform. The announcement was released on 19 January, and already as of now, NFT artists will be allowed to mint only five NFTs per day.
Binance has decided to set other rules regarding NFTs. Starting 2 February it will in fact ask users, to complete KYC (Know Your Customer) verification and have at least two followers to mint NFTs on the platform.
In addition, the platform said there will be periodic checks for Non-Fungible Tokens that do not meet the standards.
“Users may report NFTs or collections that may violate Binance NFT minting rules and terms of service. Our due diligence team will actively review reports of fraud or rule violations, taking appropriate action if necessary.”
The company, after being deemed too permissive, ended up in the crosshairs of the US SEC, hence decided to take action. According to the SEC, its KYC (Know Your Customer) measures were considered too lenient.
Thus, the rules regarding NFTs are becoming stricter on the platform. All NFTs listed before October 2022 and with an average daily volume of less than $1,000 will be removed from the exchange.