Cryptocurrency exchange Coinbase, cryptocurrency lender Celsius, and stablecoin issuer Paxos are among the cryptocurrency firms with funds allegedly linked to the now-defunct Signature Bank.
Crypto-friendly Signature Bank was closed by New York regulators on March 12 together with the US Federal Deposit Insurance Corporation (FDIC) to "protect the US economy" as they claimed the bank posed a "systemic risk".
Cryptocurrency exchange Coinbase tweeted on March 12 that it had around $240 million in corporate funds in Signature that it hoped to fully recover.
As of the close of business on Friday, March 10, Coinbase had a balance of approximately $240 million in corporate cash in Signature. As stated by the FDIC, we expect to fully recover these funds. https://t.co/XY5L7m4RMs
โCoinbase (@coinbase) March 12, 2023
Stablecoin issuer and crypto company 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 FDIC's standard insurance of $250,000 per depositor.
Paxos currently has $250 million in Signature Bank and has private deposit insurance well in excess of our cash balance and FDIC account limits. Pursuing private deposit insurance is part of our conservative approach to managing client assets that exceed FDIC insurance limits.
โPaxos (@PaxosGlobal) March 12, 2023
The Celsius Official Committee of Unsecured Creditors, a body that represents the interests of account holders at bankrupt crypto lender Celsius, added that Signature Bank โwithheld some of their funds,โ but did not disclose the amount.
Today the US government announced the closure of Signature Bank, where Celsius held some of its funds. All depositors will be full, according to the US government. Celsius and the UCC are assessing the situation and will provide further updates. Announcement here: https://t.co/v5GSvTL7JY
โ Celsius Official Committee of Unsecured Creditors (@CelsiusUcc) March 12, 2023
He added that "all depositors will be upright."
As Signature Bank was servicing so many companies in the crypto industry, those companies without exposure likewise stepped forward to assuage fears about their related exposures.
Robby fergusonco-founder of the Web3 game development platform Immutable X and Mitch Liuco-founder of the media-focused Theta Network blockchain, separately tweeted that their respective companies had no exposure to Signature.
Related: Biden promises to hold accountable those responsible for the SVB and the collapse of the firm
Crypto.com cryptocurrency exchange also reported that it had no funds in the bank via a March 12 tweet from its chief executive, Kris Marszalek.
https://t.co/pFc4Pz9nFR has $0 exposure to Signature Bank. https://t.co/TG2h7HyXE9
โ Chris | Crypto.com (@kris) March 13, 2023
The CTO of stablecoin firm Tether, Paolo Ardoino, similarly tweeted Tether's non-exposure to Signature Bank.
#tie does not have any exposure to Signature Bank.
โ Paolo Ardoino (@paoloardoino) March 12, 2023
Signature Bank's forced closure announcement was in line with other banking-related announcements by US regulators.
The Federal Reserve said the FDIC was approved to take steps to protect depositors in Silicon Valley Banka bank focused on tech startups that experienced liquidity problems due to a bank run that spread contagion to the cryptocurrency sector.
The Fed also announced a $25 billion program to ensure ample liquidity for banks to meet the needs of their clients in times of turbulence.
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