Signature Bank closure deals another blow to crypto industry

livemint.com:

The closure of Signature Bank, a lender that counted a number of crypto companies as customers even as it recently signaled a pullback from the industry, marks another major setback for digital assets.

The US Treasury Department said the lender was closed by New York state financial regulators on Sunday and that all depositors will have access to their money on Monday.

The shutdown comes soon after the twin collapses of Silvergate Capital Corp. and Silicon Valley Bank. All the banks were, at least at one point, counted among the US’s most crypto-friendly financial institutions.

Signature and Silvergate not only stored crypto companies’ funds but also enabled fast payments between clients like hedge funds and exchanges. Those transactions were key to maintaining liquidity for the digital-asset markets.

Pull Back

Although Signature began a pull back from crypto recently, it’s still important for the industry. It had $16.5 billion in crypto-related client deposits as of March 8. Signature also ran Signet, a payment network that allowed commercial crypto clients to make real-time payments in dollars at any time, seven days a week.

After the shutdown of rival Silvergate’s SEN network in early March, Signet was the only game in town for many crypto customers when it came to quickly sending payments to exchanges and vendors, or meeting payroll. LedgerX, a crypto derivatives platform, earlier instructed clients to send domestic wire transfers to Signature instead of Silvergate.

Circle Internet Financial Ltd., the issuer of the USDC stablecoin, has said that it has $3.3 billion at Silicon Valley Bank and maintains transaction and settlement accounts for USDC at Signature.

Signet System

Coinbase Global Inc., the US’s biggest