Crypto exchange Kraken will no longer support some key financial transactions with Signature Bank.
According to a Wednesday report from Bloomberg, citing an email sent to users, non-corporate clients will not be able to make deposits and withdrawals on Kraken through Signature.
Kraken said the decision came after changes made by Signature, which has been steadily reducing its exposure to the crypto sector since December. In an investor conference reported by CoinDesk on Dec. 7, Signature Bank’s CEO Joe DePaolo emphasized that the firm was “not just a crypto bank” after relaying plans to shrink crypto deposits by $8 billion to $10 billion.
The changes in Signature’s policy include not processing crypto transactions less than $100,000, which is particularly problematic for users with smaller USD accounts.
In January, crypto exchange Binance felt the effects of this limit, issuing a statement to Bloomberg that some of its users could not make SWIFT transfers to the exchange. At the time, Binance said it was actively looking for an alternative solution, despite the fact that just 0.01% of its monthly users were serviced by Signature.
Signature was previously regarded as one of the most crypto-friendly banks, but appears to have taken a step back after increased pressure on financial institutions servicing crypto firms. After FTX’s shocking collapse in November, U.S. Senators questioned Silvergate Bank, another well-known name in the space, over its ties to the now-bankrupt crypto exchange.
Silvergate is now in the midst of regulatory scrutiny, in light of which it plans to delay filing its 10-K filing for 2022.
“The Company is currently analyzing certain regulatory and other inquiries and investigations that are pending with respect to the Company,” said Silvergate in a notice, adding that its financial results could potentially be impacted by investigations from the U.S. Department of Justice.