Silvergate Bank cuts ties with Binance, disabling USD deposits and withdrawals

Crypto-friendly Silvergate Bank has abruptly cut ties with crypto exchange operator Binance, The Block can confirm.

Binance sent an email to customers on Wednesday, two separate copies of which have been seen by The Block — one in English and one in Spanish. The email says that Binance will no longer support USD deposits and withdrawals via Silvergate Bank over SWIFT from June 11.

"USD deposits made to our Silvergate Bank account after 11 June 2021 (UTC 23:59) will be returned to your account within 21 working days," the email reads. "The returned amount may be lower due to external bank fees involved."

"Rest assured, we are working hard to provide an alternative USD solution," reads the email.

Binance declined to comment to The Block on Silvergate-related questions when reached.

Stuck in limbo

Renzo Morales Díaz, a Binance customer from Columbia, who received the Spanish copy of the email, told The Block that his funds have been stuck for "two weeks."

"I just have a pending withdrawal in USD through Silvergate, and it is delayed. But surely it will not arrive there. We do not know how Binance will now return that withdrawal," said Díaz.

Silvergate-related issues for Binance users appear to have existed for at least a few months. In late March, one user on Reddit posted that they had a problem with deposits via Silvergate Bank on Binance.

"Around three weeks ago I transferred using (SWIFT) Silvergate Bank an amount of USD $30.000 to the Binance Company Key Vision Development Ltd. Till today the funds are not credited to my Binance account. The funds not sent back to my bank account," the user said. Another user posted a similar message on Reddit about two weeks ago.

Binance launched the Silvergate funding option for international users last December. (The exchange claims to block U.S. users). The option allowed users to deposit and withdraw USD to and from their Binance accounts for buying and selling crypto on Binance using local bank accounts.

While Binance looks for an alternative USD solution, the exchange's international users have other bank transfer options available in other fiat currencies, including the euro, British pound, and Australian dollar, per the email. Other local payment methods, debit and credit cards, and peer-to-peer methods are also available, according to the email. It is unclear why Silvergate Bank ended the partnership with Binance.

It was initially unclear whether the developments impacted Binance.US, the American affiliate exchange. Following the publication of this story, Binance.US told The Block in a statement and also posted on Twitter that "[w]e are proud to continue working with [Silvergate] as one of our banking partners."

Subsequently, Silvergate also tweeted that Binance.US continues to be its customer.