Crypto-friendly bank, Signature Bank recently closed its doors after regulators claimed the continued operation of the bank could impact the stability of the financial system negatively. The Bank has been taken over by the New York Department of Financial Services but the regulators revealed depositors will be made whole. The Bank was a key partner of several crypto firms and reportedly has funds of notable crypto firms held up. This includes firms like Coinbase, Celsius, and the Stablecoin issuer, Paxos. Some of the crypto firms have voluntarily disclosed their exposure to Signature Bank following the New York regulators order to stop operations.
Signature Bank was shut down on March 12th by the New York regulators in collaboration with the United States Federal Deposit Insurance Corporation with claims that the bank looms a systemic risk and the move was to protect the U.S. ecosystem.
Signature-impacted crypto firms
Coinbase
Coinbase reported that it has a balance of approximately $420m in corporate cash at Signature Bank, as of the close of business on Friday, March 10th. However, following the resolution statement by the FDIC, the firm said it hopes to “fully” recover the funds.
Further, Coinbase said it would continue to operate as usual, stating that “all client funds continue to be safe and accessible including USDC conversions which will resume on Monday.” Moreso, client cash transactions will be facilitated using other bank partners, Coinbase said.
Paxos
Paxos stated that it holds $250M at Signature Bank alongside private deposit insurance. The private deposit insurance, according to Paxos, was a conservative approach to managing customer assets exceeding FDIC insurance limits.
Banking on the measures taken by the government to ensure customers’ funds on Signature Bank is disbursed, Paxos assured its customers that their funds are safe. Also, it claims to have a risk management structure in place that guards against risk exposures.
Celsius
Celsius confirmed holding some funds with Signature Bank and assured that “all depositors will be made whole, per US Gov.”
As the affected crypto firms make public notice of their exposure to reassure their communities. Other crypto firms that claim not to be exposed to the Signature Bank shutdown include Crypto.com, Immutable X, Tether, and Theta Network Blockchain according to their founders.
Read also;
Nissan files Metaverse Trademarks for Infiniti, Nismo & Nissan
What do you think of this article? Share comments below.
