Coinbase Partners With Signature Bank Dumping Its Partnership With Silvergate Bank

The cryptocurrency industry suffered tremendously throughout the year 2022. It was not because of the activities of the Coinbase exchange itself but the overall downtrend in the crypto market.

The crypto winter lingered for longer than any crypto market expert or guru had predicted in the first place. Many had thought that the crypto market would recover from the downtrend after a couple of months of being down.

Unfortunately, things never recovered in the year 2022 and things only started to take shape for the crypto market in the year 2023.

Major Setbacks in 2022

The major setbacks that the crypto market faced in the year 2022 were the collapse of the Terra Network and the FTX brand filing for bankruptcy.

This dented the entire crypto market performance and the investors lost their trust in the industry. To this day, the crypto market is trying to recover but there is another major hiccup that may stop it from achieving that.

Potential Downfall of Silvergate Bank

The Silvergate Bank, which is known for being a proponent of the cryptocurrency industry has started to lose its traction.

This is because reports started roaming around that the particular platform was facing a financial crunch and it may soon file for bankruptcy.

Such rumors have once again, given flashbacks to the entire cryptocurrency industry. It seems that the crypto market is to face the same situation as it did back in November 2022, when FTX went bankrupt.

Since FTX’s demise, the cryptocurrency exchanges had to do a lot to regain the trust that the investors had lost in their platform and the crypto industry entirely.

They even introduced the proof-of-reserve (PoR) that the exchanges release time after time to show that they have enough reserves to face any downtrends.

Surprisingly, the crypto firms such as Coinbase had these reserves stored in the Silvergate Bank, which is likely to file for bankruptcy.

Therefore, Coinbase had all the reasons to leave its side and find a better option for banking purposes and storing funds.

Ever since Silvergate’s issue was brought up, Coinbase was facing a decline in its market share prices as well as an influx of investors plus cryptocurrencies.

For the exchange, it was the best business decision it could make despite the fact that it had been linked with the Silvergate Bank for years.

Coinbase Partners with Signature Bank

As of now, it has been confirmed that Coinbase has severed its ties with the troubled bank. It has left its corner and has already found a partner that will be facilitating its financial needs in the future.

Coinbase has just announced that it is no longer in partnership with Silvergate and instead, it has partnered with Signature Bank.

Although several other cryptocurrency exchanges and firms have left Silvergate’s side, Coinbase was the most prominent entity in the sector.

Therefore, as the exchange has severed its ties, it has been highlighted the most. Investors are now less confused and uncertain about the safety of their funds with the Coinbase exchange.

Prime Clients to be with Signature Bank

Coinbase has confirmed and sent communications to its Coinbase Prime Clients that their accounts will no longer be with Silvergate Bank.

Instead, the accounts will be with the Signature Bank. It further revealed that the decision was made immediately so the accounts have been shifted to the particular bank.

The exchange has revealed that with immediate effect, the clients carrying out deposits and withdrawals using fiat currencies would be facilitated by the Signature Bank.

It has been communicated in advance that the requests using the Silvergate Bank option will no longer be honored. Instead, the users will need to change the deposit/withdrawal preferences for fiat currencies to the Signature Bank.

It seems that the major crypto firms have started to make similar decisions to regain the trust of customers. This could help deflect the major crash in the crypto industry that currently looks imminent.