BlocksInform
Signature bank, one of the few federally regulated banks in the United States to have actively lobbied for digital assets, is described as one of the few remaining banks with news of its competitor, silvergate, is facing significant stress due to his exposure to ftx and charges that he was responsible for the merger of the alameda foreign exchange and investment funds.
In Dec. 2022, the Financial Times wrote that Signature planned to offload up to $10 billion in deposits related to the cryptocurrency industry. The move marked a u-turn for a bank that achieved rapid growth by aggressively pursuing digital asset clients amidst broader turmoil in the crypto industry following falling token prices and the bankruptcy of the ftx exchange, a signing client. New York Bank stocks have plummeted by over 50% since the beginning of 2021, after being the top-performing stock in the kbw bank index last year.
The chief operating officer of the signature bank, Eric Howell, told us at the end of December. that the bank wanted to reduce the share of crypto-related deposits to less than 15% of total deposits from the current 23%,”we’re not just a crypto bank and we want that to come across loud and clear.”
The misfortunes of Silvergate lead to the customers of Signature.
It's been over three months now. The signature is now, because of the misfortunes of Silvergate, one of the few banks still in a position to process transactions for a host of crypto companies that need it.
On March 2nd, Yahoo Finance reported that LedgerX has begun to deflect customers to Signature. To get clear of Silvergate Bank, ledgerx has elected to transition to the signature bank as a new recipient of Canadian wire payments, rumors which have been reported by yahoo and bloomberg but checked by any signature or ledgerx.
In a statement, Signature Bank said, "Although we may not be able to comment on specific clients, we are still in the business of holding certain US dollar deposits of active digital clients."
In addition, COINBASE tweeted to stop using Silvergate as a banking partner for Coinbase Prime customers. The cryptocurrency exchange has specified that it has a minimum enterprise exposure to silvergate and that it will be the transition to the bank of signing on mar. 2. In a memo sent to clients, Coinbase wrote:
“Coinbase Prime has elected to make changes to our USD banking partners. We facilitate withdrawals and fiduciary deposits using the signature bank, starting now. We ask that you update your pay instructions from the coin base to Signature Bank."
The decision to accept crypto exchanges, stablecoin issuers, and bitcoin miners that customers helped triple Signature deposits of 33.4 billion dollars in 2017. The bank began its crypto activity four years ago and is one of the only federally regulated American banks known to have made large-scale deposits with crypto clients.
Signing must take up its own challenges.
It was in a class action last month, Signature is alleged to "substantially facilitate" the fund association between FTX and its privately owned trading company Alameda Research, enhanced regulatory oversight of the bank.
Apart from that, Kraken has recently pointed out to some users that signing will be phased out for transactions under $100,000. According to Bloomberg, the exchange informed certain users that it would no longer be able to make deposits or withdrawals in dollars by means of the signature in amounts below this amount.
Effective November 1, 2022, Signature's stock price was $160.01. As of March 3rd, SBNY negotiated at $109.61.
Other signature activities include wealth management and loans of funds, through which it finances calls for capital from mutual funds on behalf of clients.
On the other hand, silvergate, the troubled US bank owned by Silvergate Capital which took deposits from crypto customers, defended its role in the acceptance of ftx deposits and alameda search. Ftx was among the largest crypto exchanges in the world prior to its failure in November. The signing bank stated that its deposit relationship with ftx and its affiliates represented less than 0.1% of its total deposits.
Dorian Batycka is a journalist interested in art and technology. He's already contributed to coindesk, decipher, artforum, artnet news, art journal, and many more. He is available on Twitter and Instagram @temp_projects, where he often recalls financial and artistic news, scandals and events.
