More than a week after New York regulators shut down crypto-friendly Signature Bank, Coinbase has reportedly stopped supporting the agency’s Signet payments platform
Coinbase users will not be able to use Signet to send money outside of banking hours until further notice, according to a March 20 report from The Wall Street Journal. The cryptocurrency exchange is reportedly looking for another payment network provider and awaits the outcome of the Signature situation.
The crypto-friendly bank is the third domino to fall after Silvergate Bank on March 8 and Silicon Valley Bank on March 10. Despite financial regulators claiming they stepped in "to protect the U.S. economy by strengthening public confidence in our banking system," the report indicated that Signature had no solvency issues when it closed on March 12.
The FDIC announced that the bank’s deposits and loans (excluding about $4 billion in cryptocurrency deposits) will be sold to Flagstar Bank, a unit of New York Community Bank. The government company said it plans to offer cryptocurrency deposits “directly to customers” through digital bank accounts. Coinbase, Celsius, and Paxos all had funds tied to Signature at the time of the bank's closure. Coinbase said it expects $240 million in company assets to be “fully recovered,” Paxos reported $250 million in bank holdings, and Celsius announced some exposure but did not disclose specific amounts.
The U.S. House of Representatives Financial Services Committee will hold a hearing on March 29 to explore the failures of Silicon Valley Bank and Signature Bank. FDIC Chairman Martin Gruenberg and Fed Vice Chairman Michael Barr are expected to testify.
