09Feb
Banking Challenges for the Crypto Industry: Heightened Regulatory Scrutiny Behind Bank's Reluctance to Partner with Digital Asset Companies
TradingLounge Support |09 Feb, 2023
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Banking,
Challenges,
Crypto Industry,
Regulatory Scrutiny,
Digital Asset Companies,
Money Transfers,
Binance,
Reluctance,
Financial Institutions,
Wire Transfers,
Risk,
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The concept of cryptocurrency promises independence from financial institutions and banks. However, the current state of the industry requires many digital asset companies to partner with traditional finance firms to provide customers with seamless access to fiat currency. This has resulted in a significant challenge for the crypto industry.
Rising Regulatory Scrutiny Behind Bank's Reluctance to Partner with Crypto Firms As regulatory bodies ramp up their warnings to banks about the risks associated with doing business with crypto firms, the number of banks that are willing to process wire transfers for the crypto industry has declined. This trend reached a head on Monday when Binance, the world's largest crypto exchange, announced it would temporarily halt US dollar deposits and withdrawals through bank accounts. Although no official reason was given, Binance CEO Changpeng "CZ" Zhao hinted that some banks are withdrawing their support for crypto. This comes after Binance's banking partner Signature Bank decided to no longer handle transactions below $100,000.
Finding Banking Partners Remains a Challenge for Crypto Companies The crypto industry has long struggled with finding reliable banking partners to manage money transfers for digital asset purchases and sales. The recent turmoil in the industry and heightened regulatory warnings are only making it more difficult for crypto companies to find willing partners. Binance's suspension of US dollar bank transfers is just one example of the growing challenges facing the crypto industry.
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