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U.S. shuts Signature Bank, lender to Paxos, Coinbase, citing systemic risk

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U.S. regulators closed New York-based Signature Bank, one of the biggest lenders in the crypto industry, due to risks of a systemic bank failure, the U.S. Treasury Department, Federal Reserve, and Federal Deposit Insurance Corporation (FDIC) said in a joint statement.

See related article: New York attorney general sues KuCoin for ‘falsely representing itself as an exchange’

Fast facts

  • “All depositors of [Signature Bank] will be made whole. ​​As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer,” the statement said.
  • This follows the closure of Silicon Valley Bank last Friday, which is the largest U.S. bank failure since the collapses of Lehman Brothers and Washington Mutual during the 2008 financial crisis. 
  • The FDIC-insured Signature is a major lender to the cryptocurrency sector, with total assets of about US$110 billion and total deposits of over US$88 billion as of the end of last year, according to the New York Department of Financial Services.
  • Cryptocurrency exchange Coinbase tweeted Monday morning in Asia that it had about US$240 million in corporate cash at Signature as of March 10, while noting that the company expects to fully recover those funds.
  • Binance USD (BUSD) stablecoin issuer Paxos said it currently has US$250 million at Signature Bank.

See related article: Crypto bank Silvergate to close, return all deposits; becomes latest victim of 2022 crypto turmoil





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