By Zachary Stone
The shutdown of Signature Bank by New York regulators has affected the crypto space more than initially thought. Because of the incident, crypto exchange Okcoin has halted USD deposits on its platform till further notice.
Okcoin CEO Hong Fang in a tweet on 13 March said the although the exchange has no exposure to Silicon Valley Bank, the shutdown of Signature Bank has affected Okcoin because it was its main partner for processing USD transactions. Precisely, U.S. dollar wire and ACH deposits have been “immediately paused” as a result of the development.
What's temporarily paused @Okcoin:
– USD deposit by wire and ACH has been immediately paused. We don't want your deposit to get stuck
– Over-the-counter services will be temporarily paused too (aka quick-buy and recurring-buy)
— Hong (@hfangca) March 13, 2023
New York regulators closed down Signature Bank on Sunday, 12 March citing risks to customers. Being a major crypto-friendly bank, the situation has created panic in the crypto community. The authorities however assured that no customer of the bank would lose their funds since it was fully insured by the FDIC which will compensate them.
The over-the-counter (OTC) feature of the exchange has also been suspended temporarily since it involves trading with USD. Other features that have been affected are the quick buy and recurring buy functions, “crypto transactions by credit card”, and “trading USD-crypto trading pairs.”
Customer Funds Are Safe
In spite of the suspension of USD deposits and OTC trading, the exchange assures that customer funds remain unaffected by the changes. In another tweet on Okcoin’s official Twitter handle, the management said the exchange is “closely monitoring the situation with NYDFS and Signature Bank.
Fang says that the closure of the bank and its effect is only a minor issue and the exchange has experienced worse than this in its years of existence. The exchange is also looking for alternative channels of transactions while the situation lingers.
Other Institutions Affected by Signature Bank
Signature Bank was definitely a key player in the crypto space because its shutdown has affected many crypto startups. Among them are Coinbase, Paxos and Celsius, all of which have declared they had major exposures to the bank.
As the days go by, there may be more revelations about how the shutdown of Signature Bank or the other two has impacted crypto investors. Meanwhile, withdrawals and trading of non-USD pairs is unaffected and Okcoin is still running smoothly.