Monat: März 2023

• Marathon Digital, a Bitcoin miner, said their funds held at Signature Bank are safe and available for use after the bank closure.
• Marathon Digital holds 11,000 Bitcoin which provides it „financial optionality that extends beyond the traditional banking system.“
• Other firms like Paxos, Coinbase and True Coin also had exposure to Signature Bank and affirmed that their customer deposits would be fully guaranteed.

Signature Bank Closure

On March 12th, the New York Department of Financial Services closed Signature Bank. The Federal Deposit Insurance Corporation (FDIC) was appointed as the receiver and all assets and deposits were moved to Signature Bridge Bank. FDIC stated that all depositors would be made whole.

Marathon Digital Response

Bitcoin miner Marathon Digital stated that $142 million of cash deposits were held at Signature Bank but are still accessible for treasury purposes. Additionally, Marathon has 11,000 Bitcoin holdings which provide them financial optionality outside of traditional banking systems. As a result of this news MARA stock rose 18% today to $6.36 according to Yahoo Finance data.

Other Firms Exposure

Stablecoin issuer Paxos had $250 million at Signature Bank but assured customers that all deposits would be fully guaranteed when banks open again. Coinbase also revealed they held $240 million with the failed bank but could recover these funds when the bank opened back up again. Lastly, True Coin had $852.27 million deposited which will not affect its user’s minting and redemptions of TUSD when banks reopen.

Conclusion

Overall, despite the closure of Signature Bank there is assurance from both Marathon Digital as well as other firms who had exposure to it that customer deposits will be made whole in due time when banks open again soon enough.

Takeaway

The takeaway from this news is that cryptocurrency miners like Marathon have access to digital financial options outside of traditional banking systems which can help protect funds in case of a bank failure such as this one with Signature Bank

• Silvergate Bank must return $9.85 million to BlockFi as part of the latter firm’s bankruptcy proceedings.
• The two companies entered an agreement in August 2020, where Silvergate acted as a depository institution and BlockFi established a reserve containing $10 million.
• Silvergate recently delayed its 10-K filing due to ongoing regulatory investigations, leading some major crypto firms to distance themselves from the bank.

Silvergate Must Return $9.85M Deposit to BlockFi

Silvergate Bank has been ordered to return $9.85 million to BlockFi as part of the latter firm’s ongoing bankruptcy proceedings, according to a March 3 filing. This is due to an agreement set up between the two companies prior to BlockFi’s bankruptcy, where Silvergate acted as a depository institution and BlockFi established a reserve containing $10 million with unrestricted access for 90 business days after the last relevant transfer.

History of Relationship Between Companies

After BlockFi filed for bankruptcy in November 2022, Silvergate stated that it had less than $20 million of exposure to them and was not a custodian for their Bitcoin-collateralized SEN Leverage loans or had any investments in them. Despite this, they maintained a close relationship and BlockFi referred to them as their “banking partner” on Nov. 10 before halting all withdrawals indefinitely due to FTX’s separate collapse that day.

Recent Regulatory Investigations

This week’s court order is seemingly unrelated to recent controversy around Silvergate when they announced that they would delay their 10-K filing and alluded towards various ongoing regulatory investigations on Mar 1st 2021. That led many major crypto companies like BlockFi, who didn’t comment on the issue this week, distancing themselves from the crypto-friendly bank looking out for their own interests.

Conclusion

In conclusion, this court order is part of Blockfi’s ongoing bankruptcy proceedings which has more than 100 000 creditors owing between one billion and ten billion dollars each with them having unrestricted access of funds amounting up too nine point eight five million dollars released by Silveregate Bank per court order based on an agreement made between both parties before Blockfi declared bankrupty in November 2022