Paxos, Coinbase, and Celsius Reveal Exposure to Signature Bank

Signature Bank, based in New York, had partnered with several cryptocurrency exchanges to provide them with a banking platform. The US government shut down the crypto-friendly Signature Bank on Sunday, citing “system risk.” 

Following the closure, the stablecoin issuer and crypto firm, Paxos said it currently holds $250 million at Signature Bank. However, the company said it has private deposit insurance that is far greater than its cash balance and FDIC per-account restrictions.

Similarly, American crypto exchange Coinbase announced on Twitter that it has exposures of about $240 million in corporate cash at Signature. The firm has, however, assured its clients that their funds are safe because all cash at banks is protected by insurance.

Additionally, the Celsius Official Committee of Unsecured Creditors (UCC) also stated on Twitter that Celsius Network has an undisclosed amount of funds in Signature. The UCC also assured customers that their deposits will be made whole.

Notably, Signature Bank has total assets of about $110.36 billion and total deposits of approximately $88.59 billion as of December 31, 2022.

Interestingly, the information was made public shortly after the US government was accused of pressuring banks to cut ties with crypto firms.

Bank Runs Set Off Stress in Crypto Market

The failures of Signature Bank, Silicon Valley Bank, and Silvergate Capital Corp have added to the current market’s woes. 

In light of the news that some of Circle’s collateral is maintained at Silicon Valley Bank (SVB), a number of USDC owners have transferred to rival stablecoins out of worry about the stability of the stablecoin.

In related news, the Bank of England has shut down its operations with the SVB branch in the UK, citing a “limited presence” and lack of “critical functions” sustaining the financial system.

Markedly, Last week saw the first time since mid-January that the price of bitcoin fell below $20,000. The king coin, however, quickly made a full recovery, and so did its counterparts. At the time of publication, Bitcoin was trading for $23050.29.