Crypto exchange Coinbase, crypto lender Celsius and stablecoin issuer Paxos are among the crypto companies with funds allegedly linked to the now-closed Signature Bank.
The crypto-friendly Signature Bank was shut down on March 12 by New York regulators in conjunction with the US Federal Deposit Insurance Corporation (FDIC) to “protect the US economy” as they claimed the bank posed a “systemic risk”.
Crypto exchange Coinbase tweeted on March 12 that it had about $240 million in corporate funds at Signature that it expected to be fully recovered.
At the close of business on Friday, March 10, Coinbase had approximately $240 million in business cash balances at Signature. As indicated by the FDIC, we expect to recover these funds in full. https://t.co/XY5L7m4RMs
— Coinbase (@coinbase) March 12, 2023
Stablecoin issuer and crypto firm Paxos also came forward, tweeting that it had $250 million in the bank, but added that it had private insurance that covers the amount not covered by the standard FDIC insurance of $250,000 per month. depositor.
Paxos currently holds $250 million in Signature Bank and has private deposit insurance that is well above our cash balance and our per-account FDIC limits. Seeking private deposit insurance is part of our conservative approach to managing client assets that exceed FDIC insurance limits.
— Paxos (@PaxosGlobal) March 12, 2023
The Celsius Official Committee of Unsecured Creditors, a body that represents the interests of account holders at bankrupt cryptocurrency lender Celsius, added that Signature Bank had “possessed some of its funds” but did not disclose the amount.
Today, the US government announced the closure of Signature Bank, where Celsius kept some of its funds. All depositors will be made healthy, according to the US government. 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
It added that “all depositors will be made healthy.”
Since Signature Bank served so many companies in the crypto industry, those companies with no exposure also came forward to allay fears about their related exposures.
Robbie Fergusonco-founder of the Web3 game development platform Immutable X and Mitch Liuco-founder of the media-focused Theta Network blockchain separately tweeted that both of their respective companies had no exposure to Signature.
Related: Biden vows to detain those responsible for SVB’s collapse, Signature
Crypto exchange Crypto.com also reported that it had no money in the bank via a March 12 tweet by CEO Kris Marszalek.
https://t.co/pFc4Pz9nFR has $0 exposure to Signature Bank. https://t.co/TG2h7HyXE9
— Kris | crypto.com (@kris) March 13, 2023
The chief technology officer of stablecoin firm Tether, Paolo Ardoino, similarly tweeted Tether’s non-exposure to Signature Bank.
#chain has no exposure to Signature Bank.
— Paolo Ardoino (@paoloardoino) March 12, 2023
The announcement of Signature Bank’s forced closure coincided with other banking-related announcements by US regulators.
The Federal Reserve said the FDIC was approved to take steps to protect depositors at Silicon Valley Bank, a tech-focused bank that was experiencing liquidity problems due to a bank run that infected the crypto sector.
The Fed also announced a $25 billion program to ensure sufficient liquidity for banks to meet the needs of their customers during turbulent times.