According to reports, several cryptocurrency companies, including Coinbase, Celsius, and Paxos, are among those affected by the closure of Signature Bank.
The bank, which was considered crypto-friendly, was closed by New York regulators on March 12 with the help of the United States Federal Deposit Insurance Corporation, who claimed that it posed a risk to the country’s economy.
Coinbase has confirmed that it had $240 million in corporate funds at the bank but expects to get back the whole amount. Meanwhile, Paxos has also reported that it had $250 million held at the bank and has private insurance to cover the amount not protected by the standard FDIC insurance of $250,000 per depositor.
All client cash at banks continues to be protected by FDIC pass-through insurance. Due to FDIC’s hold on Signature’s transactions, we’re currently facilitating all client cash transactions with other banking partners.
— Coinbase (@coinbase) March 12, 2023
The Celsius Official Committee of Unsecured Creditors, which looks out for the customers of bankrupt crypto lender Celsius, said that Signature Bank held some of its funds without saying how much. The committee reassured that all depositors would be fully compensated.
Today the US government announced the closure of Signature Bank where Celsius held some of its funds. All depositors will be made whole, per US Gov. Celsius and the UCC are evaluating the situation and will provide further updates. Announcement here: https://t.co/v5GSvTL7JY
— Celsius Official Committee of Unsecured Creditors (@CelsiusUcc) March 12, 2023
Although Signature Bank served several firms in the crypto industry, some companies without exposure to the bank stepped forwards to alleviate concerns.
For example, Robbie Ferguson, co-founder of the Web3 game development platform Immutable X, and Mitch Liu, co-founder of the media-focused Theta Network blockchain, tweeted that their companies had no connection to Signature. Additionally, Crypto.com CEO Kris Marszalek tweeted on March 12 that the exchange had no funds in the bank.
Paolo Ardoino, the chief technology officer of Tether, took to Twitter to confirm that Tether had no exposure to Signature Bank.
#tether doesn’t have any exposure to Signature Bank.
— Paolo Ardoino 🍐 (@paoloardoino) March 12, 2023
The news of the bank’s shutdown came alongside other regulatory announcements related to banking in the United States.
The Federal Reserve authorised the FDIC to take measures to safeguard depositors at Silicon Valley Bank, which faced liquidity problems due to a bank run that impacted the crypto industry.
Additionally, the Fed launched a $25 billion program to ensure banks have enough liquidity to meet their customers’ needs during turbulent times.