Coinbase, Celsius, and Paxos reveal assets in Signature Bank
The crypto-friendly Signature Bank was a key partner for numerous crypto companies, some of which have voluntarily disclosed their exposure to the recently closed firm.
Crypto exchange Coinbase, the cryptocurrency lender Celsius, and the stablecoin issuer Paxos are reportedly among the crypto firms whose funds were associated with the now-defunct Signature Bank.
The crypto-friendly Signature Bank was shut down by New York regulators and the Federal Deposit Insurance Corporation on March 12 in order to “protect the U.S. economy” because the bank posed a “systemic risk.”
The cryptocurrency exchange Coinbase stated in a March 12 tweet that it had approximately $240 million in corporate funds at Signature that it anticipated would be fully recovered.
As of close of business Friday March 10 Coinbase had an approximately $240m balance in corporate cash at Signature. As stated by the FDIC, we expect to fully recover these funds. https://t.co/XY5L7m4RMs
— Coinbase (@coinbase) March 12, 2023
Stablecoin issuer and cryptocurrency company Paxos also came forward, tweeting that it had $250 million held at the bank but that it had private insurance to cover the amount not covered by the standard $250,000 per depositor FDIC insurance.
Paxos currently holds $250M at Signature Bank and holds private deposit insurance well in excess of our cash balance and FDIC per-account limits. Seeking private deposit insurance is part of our conservative approach to managing customer assets exceeding FDIC insurance limits.
— Paxos (@PaxosGlobal) March 12, 2023
The Celsius Official Committee of Unsecured Creditors, which represents account holders of the bankrupt cryptocurrency lender Celsius, stated that Signature Bank “held some of its funds” 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 made whole, per US Gov. 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 also stated that “all depositors will be refunded in full.”
As Signature Bank serviced a large number of firms in the cryptocurrency industry, firms with no exposure came forward to allay concerns about their exposures.
Robbie Ferguson, co-founder of the Web3 game development platform Immutable X, and Mitch Liu, co-founder of the media-focused Theta Network blockchain, independently tweeted that neither of their companies had any exposure to Signature.
Bitcoin exchange CEO Kris Marszalek also tweeted on March 12 that Crypto.com had no funds in the bank.
https://t.co/pFc4Pz9nFR has $0 exposure to Signature Bank. https://t.co/TG2h7HyXE9
— Kris | Crypto.com (@kris) March 13, 2023
Paolo Ardoino, the chief technology officer of stablecoin company Tether, also tweeted about Tether’s lack of exposure to Signature Bank.
#tether doesn’t have any exposure to Signature Bank.
— Paolo Ardoino (@paoloardoino) March 12, 2023
The announcement of the forced closure of Signature Bank coincided with other banking-related announcements made by U.S. regulators.
The Federal Reserve announced that the FDIC was authorized to protect depositors at Silicon Valley Bank, a bank focused on tech startups that experienced liquidity issues due to a bank run that spread contagion to the cryptocurrency industry.
The Fed also announced a $25 billion programme to ensure that banks have sufficient liquidity to meet the needs of their customers during turbulent times.