Coinbase cryptocurrency exchange has told its customers that Signature Bank’s Signet payments solution will be suspended until further notice.
Following the recent shutdown of Signature Bank, Brian Armstrong’s Coinbase crypto exchange has made it clear to its customers that Signet, the former’s real-time payment network, will be suspended indefinitely.
Coinbase suspends Signet service
Per a Wall Street Journal (WSJ) report, Coinbase customers will no longer be able to use Signet for real-time round-clock fund deposits and withdrawals. The largest bitcoin trading venue in the United States is now in search of a new banking partner.
While it lasted, Signet functioned as a bridge between the crypto industry and the traditional banking system, enabling Coinbase’s commercial customers to execute real-time payments on a 24/7/365 basis without restrictions.
Crypto firms face banking hurdles
Signature Bank, whose crypto service was being investigated by U.S. authorities even before its shutdown on March 12, has been sold by the federal deposit insurance commission (FDIC) to Flagstar Bank.
Though the FDIC denied reports that it made it mandatory for potential Signature Bank buyers to divest the lender’s crypto service at all costs, the rumor has proven to be true, as the bank’s Signet solution is still under the control of the watchdog.
As reported by crypto.news on March 20, the FDIC has revealed plans to return the entire crypto deposits still in Signature Bank, directly to their owners, as the latter’s purchase by Flagstar Bank does not include its digital assets business.
As the U.S. banking crisis continues, with authorities blaming bitcoin (BTC) and altcoins for the collapse of traditional banks rather than their own faulty monetary policies and rapid rate hikes, crypto-focused businesses are now looking to forge alliances with banking partners abroad.
With crypto market participants in the U.S. increasingly finding it hard to operate in the region due to harsh policies, experts have argued that there could be an exodus of web3 projects from the country to jurisdictions with amenable regulations sooner than later.