Coinbase has stopped supporting Signature Bank's Signet platform for cryptocurrency payments. The move comes a week after New York regulators shut down the bank's operations. According to a March 20 Wall Street Journal report, Coinbase users will not be able to use Signet to send funds after banking hours until further notice.
Coinbase had apparently been looking for an alternative payment network provider while waiting for the situation with Signature to be resolved. Signature Bank is the third bank to fail following the failure of Silvergate Bank on March 8 and Silicon Valley Bank on March 10. Although financial regulators claimed to have intervened to "protect the U.S. economy by strengthening public confidence in our banking system," reports have suggested that Signature was not insolvent at the time of its March 12 closure.
The U.S. Federal Deposit Insurance Corporation announced that Signature Bank's deposits and loans - except for about $4 billion in cryptocurrency deposits - were sold to Flagstar Bank, a subsidiary of New York Community Bancorp. The government corporation said it planned to provide cryptodeposits "directly to customers" with a digital bank account.
Coinbase, Celsius and Paxos had funds linked to Signature Bank at the time of its closure. Coinbase said it expected to "fully recover" $240 million in assets from the company, Paxos reported having $250 million in the bank, and Celsius announced some exposure, but not the exact amount.
The U.S. House Financial Services Committee will hold a hearing to examine the failures of Silicon Valley Bank and Signature Bank on March 29. Martin Gruenberg, Chairman of the FDIC, and Michael Barr, Vice Chairman of Supervision at the Federal Reserve, are expected to testify.
