On October 1, 2019, American bank holding company Silvergate Capital Corporation announced it would no longer provide banking services to cryptocurrency exchange Binance. The move came as a surprise to many in the crypto community, as Silvergate had been one of the most crypto-friendly banks in the United States.
So why did Silvergate cut ties with Binance? There are a few possible reasons.
One reason could be regulatory pressure. Binance is not registered with the US Securities and Exchange Commission (SEC), and US regulators have been cracking down on unregistered exchanges in recent months.
Silvergate, a California-based crypto bank, has announced that it will be terminating its services to Binance, the world’s largest crypto exchange. This termination of service will take effect immediately and all funds held by Silvergate on behalf of Binance must be withdrawn by May 31st 2021.
We urge all Silvergate and Binance users to take this announcement seriously and take immediate steps to withdraw their funds from both platforms as soon as possible in order to avoid any potential financial losses or inconvenience.
Thank you for your attention and cooperation.
Silvergate may have decided that it was too risky to continue doing business with Binance.
Another possibility is that Silvergate simply decided that Binance was not a good fit for its business model. Silvergate is a small bank, and it may have decided that working with a large cryptocurrency exchange was more trouble than it was worth.
Whatever the reason, the loss of Silvergate as a banking partner is a setback for Binance. The exchange will now have to find another bank to work with, which could be difficult given the current regulatory environment in the United States.