The now-defunct Signature Bank is said to have had financial ties to many cryptocurrency companies, including Coinbase, the stablecoin issuer Paxos, and the crypto lender Celsius.
The crypto-friendly Signature Bank was closed down by New York authorities and the United States Federal Deposit Insurance Corporation on March 12 to “defend the U.S. economy” because they believed the bank constituted a “systemic danger.”
On March 12, the cryptocurrency exchange Coinbase tweeted that it had about $240 million in corporate money at Signature, which it anticipated will be completely recovered.
Paxos, a stablecoin issuer and cryptocurrency company, also stepped forward, tweeting that it had $250 million in deposits at the bank but also mentioned that it has private insurance to cover the balance that was not covered by the FDIC’s statutory depositor insurance of $250,000 per depositor.
The insolvent cryptocurrency lender Celsius’s account holders are represented by the Celsius Official Committee of Unsecured Creditors, which stated that Signature Bank “kept part of its cash” but did not specify how much.
“All depositors will be made whole,” it continued.
Because Signature Bank provided services to so many businesses in the cryptocurrency sector, those businesses with no exposure also spoke up to allay concerns about their own vulnerabilities.
Both Mitch Liu and Robbie Ferguson, co-founders of the media-focused Theta Network blockchain and the Web3 game creation platform Immutable X, stated that their respective firms have no exposure to Signature.
Moreover, CEO Kris Marszalek of Crypto.com tweeted on March 12 that the company has no money in the bank.
Paolo Ardoino, the chief technical officer of the stablecoin company Tether, also tweeted about Tether’s lack of exposure to Signature Bank.
The news of the forced closure of Signature Bank coincided with other banking-related pronouncements made by US regulators.
The FDIC was authorized, according to the Federal Reserve, to act to safeguard depositors at Silicon Valley Bank, a bank that focuses on tech startups and had liquidity problems as a result of a bank run that stretched to the cryptocurrency industry.