Coinbase, one of the biggest crypto exchanges in the United States, has been forced to abandon Signet, the Signature Bank payments service, following its collapse.
Following the collapse of Signature Bank, and the controversy it has caused in the United States, Coinbase has moved to cut all ties with the bank.
According to a recent Wall Street Journal report, the crypto exchange has stopped using the bank’s Signet Network.
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Coinbase is now actively looking for a new payment service provider. The decision comes over a week after federal and New York state regulators closed Signature Bank. All of the bank's deposits were transferred to an entity run by the Federal Deposit Insurance Corporation (FDIC) called Signature Bridge Bank.
Coinbase reportedly informed its customers that those who rely on Signet would no longer be able to transact in fiat outside normal banking hours. However, they could still make crypto transactions on the crypto exchange, including conversions.
While regulators took over Signature Bank, the Signet Network is still operating. However, various reports claim that some clients had experienced glitches while using the payment system.
Signature Bank went down soon after the collapse of Silvergate Bank, another bank with deep ties to crypto. The collapse of Silicon Valley Bank a few days before had triggered fears that the US banking industry was on the brink of collapse.
While several reports have claimed that Signature Bank had no solvency issues, regulators intervened due to losing confidence in its leadership. Regulators said they took over the bank to “protect the US economy by strengthening public confidence in <their> banking system.”
According to the New York banking regulators, the bank failed to provide consistent and reliable data.