Signature Bank shutdown deals another blow to the crypto industry
The closure of Signature Bank, a lender that counted a number of crypto companies as clients, although it recently signaled a retreat from the industry, marks another major setback for digital assets.
The closure of Signature Bank, a lender that counted a number of crypto companies as clients, although it recently signaled a retreat from the industry, marks another major setback for digital assets.
The US Treasury Department said the lender was shut down by New York state financial regulators on Sunday and that all depositors will have access to their money on Monday.
The US Treasury Department said the lender was shut down by New York state financial regulators on Sunday and that all depositors will have access to their money on Monday.
The closure comes shortly after the twin collapses of Silvergate Capital Corp. and Silicon Valley Bank. All of the banks were, at least at one point, considered among America’s most crypto-friendly financial institutions.
The closure comes shortly after the twin collapses of Silvergate Capital Corp. and Silicon Valley Bank. All of the banks were, at least at one point, considered among America’s most crypto-friendly financial institutions.
Signature and Silvergate not only stored the crypto companies’ funds, but also enabled fast payments between clients such as hedge funds and exchanges. These transactions were key to maintaining liquidity for the digital asset markets.
Signature and Silvergate not only stored the crypto companies’ funds, but also enabled fast payments between clients such as hedge funds and exchanges. These transactions were key to maintaining liquidity for the digital asset markets.
Although Signature started pulling back from crypto recently, it is still important to the industry. It had $16.5 billion in crypto-related client deposits as of March 8. Signature also operated Signet, a payment network that allowed commercial crypto clients to make real-time payments in dollars at any time, seven days a week.
Although Signature started pulling back from crypto recently, it is still important to the industry. It had $16.5 billion in crypto-related client deposits as of March 8. Signature also operated Signet, a payment network that allowed commercial crypto clients to make real-time payments in dollars at any time, seven days a week.
After the shutdown of rival Silvergate’s SEN network in early March, Signet was the only game in town for many crypto customers when it came to quickly sending payments to exchanges and suppliers, or meeting payroll. LedgerX, a crypto derivatives platform, previously instructed clients to send domestic wire transfers to Signature instead of Silvergate.
After the shutdown of rival Silvergate’s SEN network in early March, Signet was the only game in town for many crypto customers when it came to quickly sending payments to exchanges and suppliers, or meeting payroll. LedgerX, a crypto derivatives platform, previously instructed clients to send domestic wire transfers to Signature instead of Silvergate.
Circle Internet Financial Ltd., the issuer of the USDC stablecoin, has said it has $3.3 billion with Silicon Valley Bank and maintains transaction and settlement accounts for USDC with Signature.
Circle Internet Financial Ltd., the issuer of the USDC stablecoin, has said it has $3.3 billion with Silicon Valley Bank and maintains transaction and settlement accounts for USDC with Signature.
Coinbase Global Inc., America’s largest crypto exchange, integrated Signet to allow clients to instantly transfer funds last October. Back in 2021, stablecoin TrueUSD was integrated into Signet for instant settlement. Signet also integrated with Fireblocks in 2020.
Coinbase Global Inc., America’s largest crypto exchange, integrated Signet to allow clients to instantly transfer funds last October. Back in 2021, stablecoin TrueUSD was integrated into Signet for instant settlement. Signet also integrated with Fireblocks in 2020.
When Signet goes out of commission, users may have trouble getting in and out of exchanges quickly, dramatically affecting crypto market liquidity.
When Signet goes out of commission, users may have trouble getting in and out of exchanges quickly, dramatically affecting crypto market liquidity.
Already, tradeability for Bitcoin-to-dollar and Bitcoin-to-Tether transactions on some US exchanges has dropped between 35% and 45% from early March to Saturday, according to research firm Kaiko. Signature’s collapse is likely to increase its effect.
Already, tradeability for Bitcoin-to-dollar and Bitcoin-to-Tether transactions on some US exchanges has dropped between 35% and 45% from early March to Saturday, according to research firm Kaiko. Signature’s collapse is likely to increase its effect.
