More than a week after cryptocurrency bank Signature Bank was shut down by New York regulators, Coinbase has stopped supporting the entity’s Signet payments platform.
According to a March 20 report in the Wall Street Journal, Coinbase users will not be able to use Signet to send funds outside of banking hours until further notice. Apparently, the cryptocurrency exchange was looking for another payment network provider and waiting for the outcome of the situation with Signature.
The crypto-friendly bank was the third domino to fall following the failure of Silvergate Bank on March 8 and Silicon Valley Bank on March 10.. Although financial regulators claimed they intervened to “protect the US economy by strengthening public confidence in our banking system,” reports have suggested that Signature had no solvency problems at the time of its closing on December 12. March.
The US Federal Deposit Insurance Corporation announced that the bank’s deposits and loans — with the exception of about $4 billion in crypto deposits — would be sold to New York Community Bancorp’s Flagstar Bank. The government corporation said it planned to provide crypto deposits “directly to customers” with a digital bank account.
Today, we entered into an agreement with a subsidiary of New York Community Bancorp, Inc., to purchase and assume deposits and assets out of Signature Bridge Bank. Read more ➡️ https://t.co/bSshY93lBh. pic.twitter.com/b9RBvYtGF7
—FDIC (@FDICgov) March 19, 2023
Today we entered into an agreement with a subsidiary of New York Community Bancorp, Inc., to purchase and assume deposits and assets of Signature Bridge Bank.
Coinbase, Celsius, and Paxos all had funds tied to Signature at the time of the bank’s closure. Coinbase said it expected to “fully recover” $240 million in company assets, Paxos said it had $250 million in the bank, and Celsius announced some exposure, but not the exact amount.
The US House of Representatives Committee on Financial Services will hold a hearing on the bankruptcies of Silicon Valley Bank and Signature Bank on March 29. Martin Gruenberg, Chairman of the FDIC, and Michael Barr, Vice President of Supervision at the Federal Reserve, are expected to testify.
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