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Silvergate Bank, a major financial institution that works with cryptocurrency exchanges ranging from Kraken to Coinbase, recently severed ties with Binance.
Silvergate Bank cuts ties with Binance
Earlier this past Wednesday, Binance sent an email to its users stating that the platform will no longer support deposits and withdrawals via Silvergate Bank via SWIFT as of this Friday. Currently, Binance USD bank transfer options are still not available.
“USD deposits deposited into our Silvergate Bank account after June 11, 2021 (23:59 UTC) will be returned to your account within 21 business days. Returns may be lower due to external banking fees involved,” the email reads. “Rest assured, we are working hard to provide an alternative in USD.”
Why did Silvergate Bank cut ties with Binance?
While it remains unclear why Silvergate Bank abruptly ended its partnership with Binance, the bank’s recent partnership with Facebook’s stablecoin project could be the reason.
Recently, the major cryptocurrency has been embroiled in controversy, facing investigations by the US Department of Justice, Internal Revenue Service and Commodity Futures Trading Commission into money laundering and tax evasion.
As the exclusive issuer of Diem’s stablecoin, it’s possible the California-based bank is looking to distance itself from its association with Binance and its recent regulatory troubles.
Coincidentally, Diem recently moved its main operations back to the United States – withdrawing its application for a payment system license from Switzerland. It is important to note that Binance has been banned in the US since 2019.
As Binance searches for new US dollar providers, the exchange will continue to offer other bank transfer options in various fiat currencies – including but not limited to Euros, British Pounds and US Dollars. la Australia, among others. Other payment methods such as debit, credit and P2P methods are also available.
Interestingly, Binance.US – Binance’s affiliated exchange in the US – tweeted that it will continue to work with Silvergate as one of its banking partners.
As a legally separate entity, Binance.US is unlikely to face the same regulatory scrutiny as its parent company – which explains why Silvergate chose to continue working with the affiliate. USA.
Binance.US, the US branch of leading cryptocurrency exchange Binance, has partnered with digital asset-friendly Silvergate Bank to offer corporate customers round-the-clock trading.
The move to step up the Binance.US institutional client game comes as Binance completely decouples from the US, possibly sending more customers to Binance.US.
Binance started kicking off US-based clients — although they cut off Americans in July 2019, shortly after the announcement of the creation of Binance.US, the company that licenses its technology. myself. Binance.US launched in September of that year.
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