• Wed. Jun 12th, 2024

Paxos And Coinbase Have Ties With Troubled Signature Bank

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Mar 15, 2023

On Sunday, Signature Bank was revealed to be bankrupt. It has been added to the ever-growing list of bankrupt banks.

The crypto community created havoc on Twitter regarding this news. They wanted to talk about if they were impacted by the collapse.

As per the FDIC, Federal Reserve, and US Treasury’s statement, the bank was closed due to the US authoritative figures.

The US authorities said that Signature Bank would be open again on Monday and that the depositors will be restored.

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It happened because the authorities of New York wanted to change the senior-level management team of the bank.

People got more frustrated because, in the past couple of days, the Silicon Valley Bank and Silvergate Bank have collapsed.

Paxos is a crypto firm that issues stablecoin. The firm revealed that they have approximately $250M at the bank. They also mentioned that they have insurance for personal deposits at the Signature Bank.

Though, they were calm about the whole situation. Paxos conveyed that things would be back to normal after it opens again on Monday.

The firm said that their money will still be there as the government is only trying to improve the bank for its clients. Paxos added that they are in no way associated with SVB, which failed about a week ago.

The collapse of the Silicon Valley Bank was one of the biggest collapses in the history of the United States of America.

Amidst the occurrences, Coinbase revealed that Signature Bank had about $240M of their money up until Friday. Coinbase said that they are hoping to retrieve their money as soon as the bank opens again.

USDC Stable After Circle Covers Shortfall

On Saturday, Coinbase gave a sign regarding the suspension of USDC conversions for a short while.

This was after Circle revealed that they had around $3.3B at the Silicon Valley Bank. The amount is equivalent to approximately $40B, which is a huge chunk of the total backing.

Over the weekend, the price of USDC fell to $0.87, though it managed to rise to $0.99 or more around Sunday, as per research.

This was after Circle conveyed that they would recompense for any issue, and authorities took measures to respond to clients’ concerns.

Creditcoin said that it was not associated with either the Silicon Valley Bank or Signature Bank. Although, Binance revealed a while ago about Signature Bank is their partner.

This was after they announced publicly that clients will be unable to transfer money that is below the amount of $100,000.

The exchange conveyed that merely 0.01% of their clients were in association with the bank at that point.

On Sunday, Binance did not reveal their operations with Signature Bank, and they did not want to reply to comments initially either.

The news of Signature Bank’s collapse and the pledge by the US authorities were revealed together.

The pledge was relevant to the US working on rules in order to maintain the economy to improve the banking sector’s conditions.

Crypto Firms Split on Exposure to Bank’s Failure

The US authorities made sure that clients of the bank will have access to their funds as soon as the bank opens on Monday.

They also conveyed that the FRB will be providing loans to banks in order to improve their conditions.

To make the financial situation of the banks better, the US government will be giving commodities to be used as collateral.

The collapse of the Silicon Valley Bank was a piece of bad news for several people including tech startups.

Even several cryptocurrency businesses were associated with them such as Pantera, BlockFi, Ripple, etc., who did not take the news well.

On the other hand, many banks revealed that they had not been impacted by the collapse of SVB, such as Crypto.com and Tether.

In addition, Signature Bank Chicago announced that they are not in any way related to the crypto world.

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