- SigNet launched in 2019 as a proprietary blockchain-based digital payments platform.
- Silvergate, the other domino in the recent US banking crisis, closed a similar service.
Cryptocurrency exchange Coinbase no longer supports Signature Bank’s real-time payment network SigNet, more than a week after the New York regulators closed the lender.
According to a report by the Wall Street Journal, Coinbase users using SigNet for US dollar deposits and withdrawals would not be able to access the services until further notice. However, the exchange is said to be searching for a new partner for the on-off ramp payments.
Signature Bank was the third domino to fall after Silvergate announced a voluntary liquidation of its assets on March 8. Silicon Valley Bank, was placed under the receivership of the Federal Deposit Insurance Corporation (FDIC) on March 10.
See Related: Signature Bank Closed By New York Regulators; Another Big Blow to Crypto Investors
Despite the closure, Signet continued operations under an interim entity, Signature Bridge Bank, created by the FDIC. The network was one of the critical infrastructures besides the Silvergate Exchange Network (SEN) owned by the now-defunct namesake lender, serving notable crypto firms, including Coinbase, Circle, and Paxos.
NYCB Acquires ‘Substantially All’ Signature Bank’s Operations
Late Sunday, FDIC announced that the New York Community Bancorp’s subsidiary, Flagstar Bank, will take over most of the assets and deposits of Signature Bridge Bank, excluding Signet.
See Related: Failed Signature Bank Cedes Non-crypto Operations To New York Community Bank Flagstar
‘‘Flagstar Bank’s bid did not include approximately $4 billion of deposits related to the former Signature Bank’s digital banking business. The FDIC will provide these deposits to customers whose accounts are associated with the digital banking business,’’ FDIC said. Since last year, the value of the Signet network dropped from approximately $30 billion to $4 billion following the bear market, per a report by the Financial Times.
Signet’s closure on Coinbase, together with the collapse of SEN, leaves the crypto sector in limbo, considering the duo was operated by crypto-friendly lenders. One of the casualties is USDC stablecoin issuer Circle, which announced on March 13 that it ‘‘will not be able to process minting and redemption through SigNet, we will be relying on settlements through BNY Mellon.’’
