Cryptocurrency firms including cryptocurrency exchange Coinbase, cryptocurrency lender Celsius and stablecoin issuer Paxos reportedly had their funds tied up with the now-defunct Signature Bank.
New York regulators joined the FDIC in shutting down crypto-friendly Signature Bank on March 12 to “protect the U.S. economy” after they claimed the bank posed a “systemic risk.” Cryptocurrency exchange Coinbase tweeted on March 12 that it has about $240 million in company funds in Signature, which it expects to fully recover.
Stablecoin issuer and cryptocurrency firm Paxos also came forward, tweeting that it holds $250 million in the bank, but adding that it holds private insurance covering $250,000 per depositor not covered by standard FDIC insurance amount. The Official Committee of Celsius Unsecured Creditors, a body that represents the interests of account holders at bankrupt cryptocurrency lender Celsius, added that Signature Bank “holds some of its funds,” without disclosing an exact amount. It added that "all depositors will be made whole."
Since Signature Bank serves a wide range of companies in the crypto industry, those without exposure have likewise come forward to quell concerns about their exposure.
Robbie Ferguson, co-founder of Web3 game development platform Immutable X, and Mitch Liu, co-founder of media-focused Theta Network blockchain, each tweeted that neither of their respective companies had approached Signature. Cryptocurrency exchange Crypto.com also reported in a March 12 tweet from CEO Kris Marszalek that it has no funds in the bank.
Paolo Ardoino, CTO of stablecoin company Tether, also tweeted that Tether had not approached Signature Bank. The announcement of the mandatory closure of Signature Bank is in line with other banking-related announcements made by U.S. regulators.
The Federal Reserve said the FDIC had been given permission to act to protect depositors at Silicon Valley Bank, a tech start-up-focused lender experiencing liquidity problems as bank runs spread to the crypto sector.
The Fed also announced a $25 billion program to ensure banks have sufficient liquidity to meet the needs of customers during the turbulent times.
