Crypto Businesses Flee ‘Operational’ Signet Network

According to infrastructure providers, Signature Bank’s Signet payment network infrastructure remains intact after the takeover by the Federal Deposit Insurance Corporation.

Signet’s blockchain builder Tassat has confirmed that Tassat’s technology remains unperturbed, despite Federal regulators taking over New York-based Signature bank on Sunday. Custody provider Fireblocks said the network was unaffected on its side.

Signet Remains Operational, But Industry Moves Elsewhere

Citing an anonymous source, Coindesk said Signature clients could still use the network with the bank the FDIC used to make customer deposits available, Signature Bridge Bank. Signature Bridge Bank CEO Greg Carmichael emphasized that Signature Bank’s former clients could access loan, deposit, and banking services without revealing the status of Signet.

An anonymous source told Bloomberg that Signet had processed transactions for their firm on March 14, 2023.

Circle CEO Jeremy Allaire said on March 13, 2023, that the firm could not process USDC redemptions and minting and noted that the firm would use BNY Mellon for settlements. Circle confirmed later that it would use Cross River to enable transactions during normal banking hours.

Coinbase, while neither confirming nor denying using Signet, said it would honor USDC: USD redemptions. CENTRE, a joint venture between Coinbase and Circle, issues USDC.

Signet remains crucial to allow crypto traders to trade 24/7 after the collapse of Silvergate’s Exchange Network. Circle relied on Signet and Signature to convert fiat to USDC and vice versa.

Silvergate announced a voluntary liquidation on March 9, 2023, promising to make depositors whole. Crypto made up about 90% of deposits in Silvergate. Coinbase severed ties with the firm shortly after, moving Prime depositors’ funds to Signature Bank.

According to crypto venture capitalist Nic Carter, regulators took control of Signature Bank because it deemed Signet a systemic risk to the U.S. banking sector.

The seizure came despite claims by Signature board member Barney Frank that the bank was solvent.

New Non-Bank Crypto Payment Rails on the Horizon

BeInCrypto recently reported findings from a JPMorgan research report that detailed the difficulties crypto firms would have in replacing SEN and Signet.

Soups Ranian, CEO of fintech firm Sardine, suggested that any future payments networks should be decoupled from banks.

U.K.-based company BCB is one such company. It offers its BLINC network as an alternative to SEN in a limited number of currencies, excluding the U.S. dollar. It does not operate as a bank.