Coinbase, one of the largest cryptocurrency exchanges in the world, has announced that it is switching its service for Prime account holders to Signature Bank.
This move comes after recent developments and, as a precautionary measure, Coinbase has stated that it is no longer accepting or initiating payments to or from Silvergate Capital.
In a tweet, Coinbase assured its clients that their funds are safe, accessible and available. The exchange also stated that it will be facilitating institutional client cash transactions with other banking partners and that it has taken proactive steps to ensure that clients experience no impact from this change.
Coinbase has "de minimis" corporate exposure to Silvergate, or minimal financial exposure to the bank.Coinbase safeguards client cash by storing it in FDIC-insured U.S. banks. In cases where a client has a considerable dollar balance, Coinbase ensures additional protection and liquidity by holding their cash in a U.S. government money market fund.
The decision to switch to Signature Bank comes after cryptocurrency-friendly bank Silvergate Capital suffered a significant blow following the collapse of Sam Bankman-Fried's FTX.
The bank's shares plunged by as much as 50% after the crypto-friendy bank stated that it would not be able to meet the March 16 deadline for submitting its annual report. It is currently studying whether it is still viable and is reviewing its financial controls.
More companies sever ties
Cryptocurrency exchange Bitstamp, crypto bank Galaxy Digital, stablecoin issuer Paxos have also jumped ship.
Meanwhile, Tether, the company behind the leading stablecoin of the same name, has confirmed that it actually has no exposure to the embattled bank.
Gamza Khanzadaev
