In the face of the ongoing banking crisis in the United States, many companies with exposure to one of the failed institutions may have great problems recovering all their funds. The situation in traditional markets is very tense as a result of last week’s collapse of three key financial institutions. However, the cryptocurrency sector has been recording a rebound in charts for several days . In addition, many entities from this industry decided to disclose that they had no ties to any of the failed banks to indicate that despite recent tensions, their situation is stable.
Who from the cryptocurrency market has not had exposure to failed banks?
The implications of the Silicon Valley Bank collapse continue to spread across a variety of markets. Two days after the bank was shut down by US regulators, Signature Bank joined the list of bankrupt entities. Both institutions had many ties to the tech, VC and cryptocurrency markets. Storing a large amount of funds in one of them could end in tragedy for many companies. So, to keep the cryptocurrency community calm, many cryptocurrency companies have started to announce that they had no exposure to any of the failed banks.
One of the first to issue a statement that it did not deposit its money in one of the banks was Tether. On March 12, CTO Paolo Ardoino tweeted that the USDT stablecoin issuer has zero exposure to Signature , which was shut down the same day. On Friday, Ardoino also revealed that his company also had no ties to Silicon Valley Bank. A similar situation occurred on March 2, when it was confirmed that no funds were held in the bankrupt Silvergate .
Let me remind you that Tether is behind the world’s largest stablecoin in terms of market capitalization, which currently stands at $73 billion. Its biggest competitor, USD Coin (USDC) from Circle, made a depeg over the weekend after reports that some of its reserves were stuck in SVB .
Similarly, the general manager of the Crypto.com exchange said that his company did not have to worry about the problems of any of the failed banks, because none of them had its funds. Kris Marszalek tweeted on March 10 and 12 that the platform’s funds are safe.
— Kris | Crypto.com (@kris) March 13, 2023
Also its competitors, i.e. Gemini and BitMEX , reported that they did not have any funds in any of the banks. Gemini noted that despite the ongoing partnership with Signature Bank, the exchange did not use its services as a custodian. The exchange said that all of its American clients’ money and GUSD token reserves are held with institutions such as JPMorgan, Goldman Sachs and State Street Bank.
1/ It’s very sad to hear the news about Signature Bank. They have been incredible partners to Gemini and our industry for the better part of a decade.
We have zero customer funds and zero Gemini dollar (GUSD) funds held at Signature Bank.
— Gemini (@Gemini) March 13, 2023
Binance said it had no funds in the accounts of Silvergate, which was one of the two largest crypto-friendly banks. Kraken CEO Jesse Powell reported that his company had no exposure to SVB.
The first cryptocurrency mining company – Bitcoin Argo Blockchain – published a statement on March 13 , in which it announced that it had no ties to Silvergate and Silicon Valley Bank. However, it said one of Argo’s subsidiaries held ” some of its operating funds in cash deposits ” with Signature.
These deposits are safe and not at risk
Argo points out, however.
The company cited the protective umbrella that the U.S. Treasury Department and the Federal Deposit Insurance Corporation are to provide as part of their program to bail out customer deposits at the bank.