Coinbase, Celsius and Paxos Stash Millions in Signature Bank!
Crypto-friendly signatory banks are key partners of many crypto companies, some of which have voluntarily disclosed their involvement in recently closed companies. Crypto exchange Coinbase, the crypto lender.
The crypto-friendly signatory banks were issued on March 12 by regulators in New York in collaboration with the U.S. Federal Deposit Insurance Corporation to “protect the U.S. economy” because they claimed the banks pose a “systemic risk.
Major cryptocurrency firms, Coinbase, Celsius, and Paxos, have announced their holdings in Signature Bank in their latest filings with the U.S. Securities and Exchange Commission (SEC).
The three companies have revealed that they hold significant funds in the US-based commercial banking institution. The disclosure comes as Signature Bank continues to expand its cryptocurrency-friendly services.
Coinbase has revealed holding $478.4 million in Signature Bank, while Paxos has disclosed $53.3 million. Celsius has not revealed its current holdings in Signature Bank but has stated that it expects to have over $200 million in cash and cryptocurrencies deposited in the bank by the end of 2021.
Stablecoin issuer and cryptocurrency company Paxos also tweeted that it had $250 million in deposits in its bank, a sum not covered by standard FDIC insurance of $250,000 per depositor.
The Celsius Official Unsecured Creditors Committee, an organization that represents the interests of account holders at failed crypto lender Celsius, added that Signature Bank “holds a portion of the funds,” but not the amount did not reveal.
Signature Bank has been a popular choice among crypto firms due to its supportive stance towards digital assets. It has previously partnered with crypto firms such as BitGo and PrimeTrust. In addition, the bank also provides a platform called the Signet system, which enables instant transfers of funds between Signature Bank customers.
Signature Bank served so many companies in the cryptocurrency industry that they also stepped forward without getting involved to allay concerns about the risks involved.
The recent disclosure from Coinbase, Celsius, and Paxos indicates that the cryptocurrency industry is gaining mainstream acceptance from traditional financial institutions.
The move towards the mainstream has been a long time coming and has seen several large banks, such as JPMorgan and Goldman Sachs, expand into the crypto industry.
The disclosure by the three cryptocurrency firms follows a similar reveal by payment processing giant Square Inc., which recently revealed a $170 million investment in Bitcoin.
The growing acceptance of digital assets by traditional financial institutions is a positive development for the crypto industry. It also indicates a growing trend of institutional adoption of cryptocurrencies as a legitimate asset class.
The announcement of Signature Bank’s forced closure aligned with other banking-related announcements by U.S. regulators.
The disclosure by Coinbase, Celsius, and Paxos of their holdings in Signature Bank indicates the growing support for the crypto industry by traditional financial institutions.
It also highlights the increasing acceptance of cryptocurrencies by institutional investors and the broader financial industry. Signature Bank’s supportive stance towards digital assets has made it a popular option for crypto firms seeking banking services.