Binance suspends fiat deposits and withdrawals from banks, USD outflows: Has the crypto-friendly bank finally turned its back?

At the end of January, one of Binance's banking partners, Signature Bank, announced that it will no longer support transactions below $100,000 for exchange customers. Now, Binance has announced that starting from February 8th, it will suspend USD bank transfers, and customers will not be able to transfer USD to Binance via the SWIFT system. Binance stated that they are actively seeking alternative solutions, as currently only 0.01% of users are serviced by Signature Bank on average each month, and other transfer methods remain unaffected.

At the end of January, one of Binance's banking partners, Signature Bank, announced that they would no longer support transactions below $100,000 for exchange customers. Now, Binance has announced that starting from February 8th, they will temporarily suspend USD bank transfers, and customers will not be able to transfer USD to Binance via the SWIFT system. Binance stated that they are actively seeking alternative solutions. Currently, only 0.01% of users are serviced by Signature Bank on average each month, and other transfer methods are not affected.

From February 8th, we will temporarily suspend all USD bank transfers.

Only a small proportion of our users will be impacted by this and we are working hard to restart the service as soon as possible.

All other methods of buying and selling crypto remain unaffected.

— Binance (@binance) February 6, 2023

Although Binance did not specify the reason for the service suspension, based on the USD bank transfer information previously provided by Binance, Signature Bank is the correspondent bank. With the suspension of USD deposit services, does this indicate that Signature Bank has restricted or even ceased providing deposit services to Binance?

According to data from DefiLlama, after Binance made the announcement, USD deposits have shown a net outflow for two consecutive days. Although this seems insignificant compared to its over $50 billion asset size, it indicates that customers still have concerns.

Additionally, Binance CEO CZ also explained that although this service accounts for a small percentage, it is still a very bad customer experience. The Binance team is working hard to find the fastest solution and stated:

While some banks have withdrawn their support for the crypto industry, others are entering the space. It is expected that last year's events will lead to some setbacks. But in the long run, we still need to continue building.