Coinbase Reportedly Pauses Support for Signature Bank’s Signet Network

San Francisco-based cryptocurrency exchange Coinbase told its clients that it no longer supports Signature Bank’s real-time payments network Signet, the Wall Street Journal reported on 20 March.

According to the publication, Coinbase users who relied on Signet for U.S. dollar deposits and withdrawals will no longer be able to send funds outside the traditional banking hours “until further notice”, as support for the service has been paused. The crypto exchange noted that it is waiting for more clarity on the outcome of Signet, and in the meantime looking for a new payments technology provider.

New York-based Signature Bank was one of the three crypto-friendly banks to go down in recent times, following Silvergate Bank’s voluntary liquidation of assets on 8 March, and Silicon Valley Bank’s closure by California’s financial regulator on 10 March. Signature was shut down by the New York Department of Financial Services (NYDFS) on 12 March in order to “protect the U.S. economy”, though some reports have suggested that the bank had no solvency issues at the time of its closure.

The U.S. House Financial Services Committee has set up a hearing for 29 March, where it will explore the failures of Signature and SVB, and why they were closed down. The fate of Signature’s Signet real-time payments network has been unclear since the start of the ordeal, though an FDIC spokesperson noted that it is “still in our receivership”, and that no decision has been made regarding it at this time.

On Sunday, the Federal Deposit Insurance Corporation (FDIC) announced that Flagstar Bank will be taking over $38.4 billion in non-crypto deposits and $12.9 billion in loans from Signature Bank. The “purchase and assumption agreement”, however, did not include around $4 billion in crypto-related deposits, which the FDIC said will be directly transferred to customers who had opened a digital banking account.