Crypto investors dealt another blow with Signature Bank closure after SVB and Silvergate collapses
- Signature Bank, like Silicon Valley Bank and Silvergate Capital, was counted among the most crypto-friendly financial institutions in the US
- Coinbase and Paxos had money in Signature, which ran the Signet payment network, the closure of which could impact crypto liquidity
The closure of Signature Bank, a lender that counted a number of crypto companies as customers, marks another major setback for digital assets as the industry becomes ever more cut off from the banking system.
The Treasury Department said Signature Bank was closed by New York state regulators Sunday and that depositors will have access to their money Monday.
The shutdown comes soon after the twin collapses of Silvergate Capital Corp and Silicon Valley Bank. All the banks were, at least at one point, counted among the US’s most crypto-friendly financial institutions.
Signature had begun a pull back from digital assets in the wake of the blow-up of the FTX exchange but still had US$16.5 billion in crypto-related client deposits as of March 8. Signature and Silvergate also enabled fast payments between customers like hedge funds and exchanges, supporting digital-asset liquidity.
Coinbase Global Inc, the US’s biggest crypto exchange, said on Friday night that it had a US$240 million balance at the bank. Paxos Global, which had previously partnered with Binance on the BUSD stablecoin, said it had US$250 million at Signature. In the tweet, Paxos said it “holds private deposit insurance well in excess of our cash balance and FDIC per-account limits”.
