Another significant blow for digital assets is the collapse of Signature Bank, a lender that had a number of cryptocurrency businesses among its clientele despite lately signaling a withdrawal from the market.
According to the US Treasury Department, the lender was shut down by New York state financial regulators on Sunday, and all depositors will have access to their money on Monday.
The closure comes shortly after Silicon Valley Bank and Silvergate Capital Corp. both failed. At one point or another, each bank was regarded as one of the US’s most crypto-friendly banking institutions.
Along with storing cryptocurrency companies’ assets, Signature and Silvergate also made it possible for clients like hedge funds and exchanges to send money quickly. These exchanges were essential for keeping the markets for digital assets liquid.
While starting to distance itself from cryptocurrency lately, Signature is still crucial to the sector. As of March 8, it had client deposits tied to cryptocurrencies worth $16.5 billion. The commercial crypto clients of Signature’s Signet payment network could make real-time payments in dollars at any time, seven days a week.