Kraken Steps Away from Signature Bank Due to Transfer Limitations
Last month, Signature banned SWIFT transactions less than $100,000
Source: Shutterstock / PL Gould, modified by Blockworks
Cryptocurrency exchange Kraken is reducing reliance on Signature Bank for some key financial transactions.
A Kraken spokesperson said that the exchange maintains a number of different funding methods to ensure clients can deposit and withdraw from their accounts.
“Consumers still have access to a range of payment methods through our other partners,” the spokesperson told Blockworks. “Clients can reach out to the client engagement team to determine which options are available to them.”
Non-corporate entities will be unable to deposit dollars or withdraw them using Signature, according to an email seen by Bloomberg, reported Wednesday. Clients have until March 15 to make deposits, and until the end of this month to make withdrawals.
Kraken reportedly told customers that this decision was influenced by recent changes executed by Signature. It isn’t clear yet which banking partner will replace Signature.
Signature didn’t return Blockworks’ request for comment by press time.
Last month, Signature told Binance that it would no longer handle SWIFT transactions worth lesser than $100,000. The US lender signaled intentions to shrink as much as $10 billion in crypto-related deposits as the industry faced headwinds last year.
Binance then told customers that support for transactions below the threshold would cease from Feb. 1 onward.
A Binance spokesperson told Blockworks that the exchange was working to find an alternative solution, and that less than 0.1% of its average monthly users were being serviced by the bank.
About 23% of Signature’s $103 billion in customer deposits came from the crypto industry as of November, according to the Financial Times. Signature has said its deposit relationship with FTX and related companies equated to less than 0.1% of overall deposits.
“We’re not just a crypto bank and we want that to come across loud and clear,” chief operating officer Eric Howell said at an industry conference.
Signature Bank is not being shunned by everyone, though. Notably, FTX’s derivatives arm LedgerX recently decided to replace its banking partner Silvergate with Signature Bank. Although LedgerX was acquired by FTX US, it remains one of the bankrupt exchange’s solvent businesses.
Don’t miss the next big story – join our free daily newsletter.