Report: Coinbase has temporarily suspended its support for Signature Bank's Signet

By: Micheal Wilson

Report: Coinbase has temporarily suspended its support for Signature Bank's Signet

March 21, 2023 5:42 AM

According to reports, the US crypto exchange was looking for a new payment network provider while waiting for the result of the problem with Signature.


Coinbase has apparently discontinued support for the crypto-friendly Signature Bank's Signet payment platform, more than a week after New York regulators liquidated the firm.


The Wall Street Journal reported on March 20 that Coinbase users will be unable to utilize Signet to send funds outside of banking hours until further notice. According to reports, the crypto exchange was looking for another payment network supplier while waiting for the result of the problem with Signature.


Following the failures of Silvergate Bank on March 8 and Silicon Valley Bank on March 10, the crypto-friendly bank was the third domino to fall. Though financial regulators said they intervened to "defend the US economy by strengthening public trust in our banking system," studies suggest that Signature had no solvency difficulties at the time of its March 12 closure.


The Federal Deposit Insurance Corporation of the United States declared that the bank's deposits and loans would be sold to New York Community Bancorp's Flagstar Bank, with the exception of around $4 billion in crypto deposits. The government business stated that it intends to offer cryptocurrency deposits "directly to clients" who have a digital banking account.

 


At the time of the bank's demise, Coinbase, Celsius, and Paxos all had funds linked to Signature. Coinbase estimated that $240 million in business assets will be "completely recovered." Paxos reported $250 million in bank deposits, and Celsius disclosed some exposure but not the specific amount.


On March 29, the United States House Financial Services Committee will hold a hearing to investigate the failures of Silicon Valley Bank and Signature Bank. The FDIC's Martin Gruenberg and the Fed's Vice Chair for Supervision, Michael Barr, are scheduled to testify.