The US authorities have announced the closure of Signature Bank, one of the crypto friendly banking institutions. Crypto companies Coinbase and Paxos have announced that some of their funds were indeed housed in this bank. Don’t panic though: the US authorities have assured that all Signature Bank customers will get their funds back.
Signature Bank closes its doors
A major crisis continues to shake the banking system in the United States. After the Silvergate Bank and the Silicon Valley Bank, it is now the turn of Signature Bank to be in turmoil. Indeed, the US Treasury, the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) have announced the closing of Signature Bank.
The specific reason for this closure has not been disclosed. Nevertheless, we remember that the American banking system is going through a crisis of the type Bank Run. Indeed, many customers seek to withdraw their funds from banking institutions. However, banks do not always have all the liquidity available. This is probably the cause of the closure of Signature Bank.
The customers of Signature Bank, however, do not have to worry. US authorities have assured that all their blocked funds will be returned. Among them are important players in the crypto ecosystem.
Coinbase and Paxos blocked at Signature Bank
Signature Bank is a partner of several crypto players. It processed, for example, part of the transactions Binance user banking. The closure of this banking institution therefore had repercussions on many crypto players.
The cryptocurrency exchange Coinbase is one of the victims of the closure of Signature Bank. The platform has announced that 240 million dollars are blocked at Signature Bank. However, this blocking has no impact on the activities of Coinbase. The exchange relies on its other banking partners to continue serving its customers. The platform relies on the Federal Deposit Insurance Corporation (FDIC) to find his funds.
In addition to Coinbase, it is the crypto company Paxos that is also affected by the closure of Signature Bank. Indeed, at the time of the closure of this banking institution, Paxos had $250 million there. The company reassures all the same that all its funds are well covered by a deposit insurance.
The funds of Coinbase, Paxos and other customers should normally be refunded. At least, this is what has been done for the customers of Silvergate Bank and Silicon Valley Bank. Nevertheless, confidence in the banking system is seriously affected. After the fall of the USDC last weekend and the fragility of banks now, Bitcoin is once again showing its usefulness and resilience. Thanks to its decentralization, Bitcoin is spared the unfortunate repercussions of the banking panic. On the contrary, those disappointed with the banking system are migrating to the queen of cryptocurrencies, whose value continues to rise.
I dream of a world where every citizen has total control over themselves, including their finances. I believe that Bitcoin is one of the tools that will achieve this revolution. Since 2019, I am learning about this cryptocurrency and spreading the word around.