Crypto “De-Banking” Carnage Ensues: Signature Bank Shut Down

Signature Bank’s closure by New York state regulators is the latest blow to the cryptocurrency industry as it loses more access to the banking system. The lender had relationships with prominent crypto companies like Coinbase and Circle. It shut down following the collapse of both Silvergate Capital and Silicon Valley Bank, which were among the most crypto-friendly banking institutions in America. Signature had already begun withdrawing from digital assets after the FTX exchange explosion, but it still held $16.5 billion in crypto-related client deposits as of March 8th. This significant “de-banking” of crypto-enabled banks will likely force such companies to establish presences in jurisdictions outside of American borders.

Circle Cuts Ties With Silicon Valley Bank: Deepens Relationship with Cross River Bank And BNY Mellon

Cryptocurrency giant Circle has announced its newfound partnership with Cross River Bank as their new commercial bank relationship to mint and redeem USDC stablecoins. It also has “expanded relationships” for USDC redemptions, including with BNY Mellon, which already provides custody services for the company’s reserves. The company confirmed that its $3.3 billion in Silicon Valley Bank deposits were safe, and the token remains redeemable at a 1:1 ratio with the dollar. The move follows a tumultuous weekend that saw Circle’s USDC stablecoin break its peg to the dollar and fall below $0.90 before restoring confidence and re-pegging back to $1. The company is now seeking to mitigate further risk by solidifying ties with larger financial institutions.

Binance’s Industry Recovery Initiative Fund Converts $1 Billion BUSD to BTC, ETH, BNB

Crypto exchange Binance has announced its official conversion of $1 billion worth of stablecoin BUSD into Bitcoin (BTC), Ethereum (ETH), Binance Coin (BNB), and other tokens to support the market. The move was financed through Binance’s Industry Recovery Initiative fund, which was established after the FTX collapse to help crypto projects deal with liquidity issues. Binance CEO Changpeng Zhao (C.Z.) tweeted on Monday to confirm that this conversion took a total of fewer than five seconds and only cost $1.29 to execute. The move likely contributed to heightened intraday buying pressure, with Bitcoin jumping to over $22,500 in Asian hours on Monday while Ethereum regained $1,600. The move came amid supplementary stress on the market after US regulators shut down Signature Bank.

Coinbase Updates Staking Terms: Protocols Responsible For Rewards, Not Coinbase

Coinbase, the largest cryptocurrency exchange in the US, has updated its staking service terms and conditions a month after US regulators cracked down on similar products. The exchange emphasized that customers earn rewards through protocols, not Coinbase, which is a specific point of contention for US regulators such as the SEC. Coinbase users must now unstake certain assets before selling or transferring them, bringing the service more in line with native blockchain networks. The assets that must be unstaked on Coinbase are Solana, Cosmos, Cardano, and Tezos. The update follows the SEC fining Kraken $30 million for allegedly violating securities laws with its staking-as-a-service product.