More than a week after New York regulators closed the crypto-friendly Signature Bank, Coinbase has reportedly stopped support for the institution’s Signet payment platform.
According to a March 20 report from The Wall Street Journal, Coinbase users won’t be able to use Signet to send funds outside of banking hours until further notice. The crypto exchange was reportedly looking for another payment network provider and waiting on 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. Though financial regulators claimed they stepped in to “protect the U.S. economy by strengthening public confidence in our banking system,” reports have suggested that Signature had no issues with solvency at the time of its closure on March 12.
The U.S. Federal Deposit Insurance Corporation announced that the bank’s deposits and loans — with the exception of roughly $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 banking 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
Coinbase, Celsius and Paxos all had funds tied to Signature at the time of the bank’s closure. Coinbase said it expected $240 million in corporate assets to be “fully recovered,” Paxos reported $250 million held at the bank, and Celsius announced some exposure but not the exact amount.
Related: Did FDIC ask Signature buyers to stop all crypto business?
The United State House Financial Services Committee will be conducting a hearing to explore the failures of Silicon Valley Bank and Signature Bank on March 29. FDIC chair Martin Gruenberg and Fed Vice Chair for Supervision Michael Barr are expected to testify.