Signature Bank

Amongst the many bank failures after the last couple of weeks, Signature’s closure has been the most damaging for the cryptocurrency, thanks to the termination of the Signature Exchange Network.

Crypto customers must close accounts by April 5th

The FDIC has declared that everyone who had crypto deposits at the bank must close their accounts and withdraw their holdings by April 5th.

If they cannot find another bank to which they can withdraw their holdings, depositors will be issued a check representing the cash value of their deposit.

Many have criticised the actions of the FDIC as far as their policy relates to crypto, and believe that their aggressive stance against Signature Bank could be thanks to “Operation Chokehold” being levied against the crypto industry by the US government.

Part of the reason that this theory has become so popular over the course of the last few weeks was that Signature Bank was actually solvent when regulators took over.

The fall of the Signature Exchange Network (SEN)

The reason that Signature was so important to the cryptocurrency industry was thanks to the Signature Exchange Network (SEN), which allowed the largest exchanges to trade with one another with less slippage and greater liquidity.

Now that the SEN has been shut down, there is significantly less liquidity in crypto markets. Moreover, there is renewed concern about the stance of regulators towards altcoins, many of which the SEC believes constitute securities.

There are some other companies that appear interested in building their exchange networks, but for now there doesn’t seem to be a clear replacement.

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