More than a week after New York regulators shut down crypto-friendly Signature Bank, Coinbase has reportedly ended support for the institution’s Signet payments platform.
According to a March 20 report from the Wall Street Journal, Coinbase users will no longer be able to use Signet to send funds outside of banking hours until further notice. The crypto exchange is reportedly looking for another payment network provider and is awaiting the outcome of the situation with Signature.
The crypto-friendly bank is the third domino to fall after the failure of Silvergate Bank on March 8 and Silicon Valley Bank on March 10. Although financial regulators claim they are stepping in to “protect the U.S. economy by strengthening public confidence in our banking system, none of them are protecting the U.S. economy by strengthening the banking system.” The report suggested that Signature had no problems with solvency when it closed on March 12.
The US Federal Deposit Insurance Corporation announced that the bank’s deposits and loans – except for about $4 billion in crypto deposits – will be sold to Flagstar Bank New York Community Bancorp. The government company said it plans to provide crypto deposits “directly to customers” with digital banking accounts.
Today, we entered into an agreement with our subsidiary New York Community Bancorp, Inc., to purchase and assume the deposits and assets of Signature Bridge Bank. Read more ➡️ https://t.co/bSshY93lBh. pic.twitter.com/b9RBvYtGF7
– FDIC (@FDICgov) March 19, 2023
Coinbase, Celsius and Paxos all had funds linked to Signature at the time of the bank’s closure. Coinbase said it expected $240 million in company assets to be “fully restored”, Paxos reported $250 million held in the bank, and Celsius announced some exposure but not the exact amount.
related: Is the FDIC asking Signature buyers to stop all crypto business?
The United States House Financial Services Committee will hold a hearing to explore the failure of Silicon Valley Bank and Signature Bank on March 29. FDIC Chairman Martin Gruenberg and Fed Vice Chairman for Supervision Michael Barr are expected to testify.