Signature Bank seizure creates obstacles for crypto industry while promoting ‘unbanked’ innovations

11 months ago 273

Crypto market players expressed unease on Monday following the seizure over the weekend of Signature Bank, a crypto-friendly New York regional bank, just days after crypto-focused bank Silvergate Capital wound down its operations and U.S. regulators shuttered Silicon Valley Bank.

“Signature Bank’s closure serves as a one-two punch as worries mount over the vulnerability of any bank with exposure to the crypto industry,” Francesco Melpignano, CEO of Kadena Eco, told TechCrunch. “With only a small number of publicly traded banks having ties to the crypto space, many investors are scrambling to place bets against them.”

Signature, known as one of the largest crypto lenders, was the second casualty from the ongoing banking crisis in the U.S., but regulators said that its customers will be made whole, meaning the government is stepping in to protect the economy from further damage.

Signature Bank had 40 branches across New York, California, Connecticut, North Carolina and Nevada. As of December 31, 2022, the bank had $110.4 billion in total assets and total deposits of $82.6 billion. Around 30% of the bank’s deposits came from the crypto industry.

The crypto industry needs to watch closely for deposit flight from regional banks over the next week, Tegan Kline, chief business officer and co-founder of Edge & Node, said. “If it gets worse, the regulators have a tremendous problem on their hands. Many regional banks may have to close.”

Read Entire Article