Kraken Confirms Reduction of Reliance on Signature Bank

As a result of choices made by Signature Bank, a New York-based banking organization, cryptocurrency exchange Kraken is bailing out on its collaboration with the bank to handle specific transaction types.

According to an email sent to users on Wednesday that was reviewed by Bloomberg, this will prevent non-corporate clients of Kraken from using Signature to make dollar deposits or withdrawals. Customers have until March 31 to remove their funds from the business after the phase-out of deposits on March 15.

Signature Bank Reduces Exposure to Crypto

The information comes after a January warning from Signature Bank to its banking partners that it would no longer assist clients of cryptocurrency exchanges with transactions under $100,000. Both Binance and Kraken were subject to this regulation. 

One month after FTX’s bankruptcy caused widespread contagion throughout the sector, Signature announced in December that it was going to gradually reduce its exposure to the cryptocurrency industry.

Similarly, Silvergate Capital also faces a number of accusations as a result of its connection with the bankruptcy of FTX. On behalf of all investors who bought Silvergate’s securities between November 9, 2021, and January 5, 2023, Pomerantz LLP recently launched a lawsuit against it in the United States District Court for the Southern District of California.

Silvergate stated recently that it would postpone filing its financial statement with the US Securities and Exchange Commission (SEC), which was scheduled on March 16. Silvergate noted operational issues on Thursday. The company’s stock has dropped by over 30% as a consequence of this delay.

Moreover, last month, Kraken CEO, Jesse Powell warned that if bad actors are not stopped, they may ultimately kill good actors because regulators often side with bad actors in the industry while making enemies with good actors. 

He continued by saying that regulators carry out this action for a variety of reasons that support their goals of deterring cryptocurrency adoption, providing cover for attacks against good people, and depleting crypto industry resources.