Multiple Crypto Firms Reveal Signature Bank Exposure

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  • Several crypto firms including Coinbase, Celsius, and Paxos have had their funds frozen by regulators closing down Signature Bank
  • Signature Bank was closed down by U.S. regulators due to a “systemic risk” posed by its financial position
  • All customers, including the crypto firms, will be made whole thanks to safeguards

Several crypto firms including Coinbase, Celsius, and Paxos have had their funds frozen by regulators closing down Signature Bank, which has been shuttered in conjunction with the United States Federal Deposit Insurance Corporation (FDIC). The regulator claims that the bank posed a “systemic risk” and that its closure was necessary to protect the US economy, which has left multiple crypto companies seeking assurances that they will get their funds back.

Two Banks Posed “Systemic Risk” to Financial System

The Department of the Treasury, Federal Reserve, and FDIC put out a joint statement on Saturday regarding both Silicon Valley Bank and Signature Bank in which it said that the financial situation of both entities posed risks to the U.S. financial sector, and that it was taking swift action to protect customers. Both banks have been shut down by regulators, with the statement seeking to reassure U.S. citizens that all was nevertheless well:

The U.S. banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry. Those reforms combined with today’s actions demonstrate our commitment to take the necessary steps to ensure that depositors’ savings remain safe.

Crypto Firms Confirm and Deny Exposure

In response to the closure, Coinbase tweeted yesterday that it held approximately $240 million in corporate funds at Signature Bank, but it expects that the funds will be fully recovered:

Paxos, which was recently told to stop minting BUSD tokens by New York regulators, said it had an equal amount held in Signature Bank:

Next up was Celsius, which the company said held “some” funds in Signature Bank:

Other firms, such as Crypto.com, were keen to stress that they had no exposure to Signature Bank in order to prevent any FUD, although given that all funds would be covered by FDIC, any scares would have been temporary.

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