Saturday, May 31, 2025

Latest

Tether CTO Denies Stablecoin’s Exposure To Signature Bank

Tether has been reported to have accessed the US banking system through the now-insolvent Signature Bank, providing theories on how the high-risk appetite of the bank could’ve contributed to its current state.

According to those familiar with the matter who told Bloomberg, Tether encouraged crypto consumers to pay for its stablecoins by sending dollars to its Bahamas-based banking partner Capital Union Bank Ltd. using Signature’s Signet payments platform.

Signet was a widely utilized payment network provided by Signature Bank that allowed the bank’s crypto clients to move fiat money to each other to settle trades, including outside of typical business hours, mirroring the 24-hour nature of cryptocurrency transactions.

Despite regulators shutting down Signature Bank, the fate of Signet, which began in 2019 as a real-time payments network and was a critical technology for many institutional crypto clients, including Coinbase and Kraken, is still unknown.

While it’s unclear when the arrangement began, it was in place when Signature Bank was seized by authorities last month, according to the sources. Although it should be noted that despite using Signet, Tether didn’t actually have any accounts at Signature.

The offshore stablecoin firm has never been sanctioned, so doing business with the company is not unlawful, but banks are required by law to know who is using their products and services.

Tether’s CTO disputed Bloomberg’s report, saying the stablecoin “didn’t have any direct or indirect exposure to Signature.”

The rumored arrangement highlights the difficulty crypto businesses have faced accessing a hesitant US banking system, even before the fall of Signature and crypto-friendly bank Silvergate Capital Corp. in March. A string of meltdowns and general volatility have kept big banks on the sidelines, driving crypto businesses to seek alternatives from smaller, more willing lenders.

Signature was seized by New York state regulators and handed over to the Federal Deposit Insurance Corporation. According to the FDIC, New York Community Bank has agreed to buy a large portion of the insolvent Signature Bank for $2.7 billion.

The 40 Signature Bank branches have since been renamed Flagstar Bank, a subsidiary of New York Community Bank. The transaction is to include the purchase of $38.4 billion in Signature Bank assets, which represents slightly more than a third of Signature’s entire assets when the bank failed a week ago.

US prosecutors were probing Signature Bank’s conduct with cryptocurrency clients before regulators abruptly seized the institution. Signature was being investigated by Justice Department investigators in Washington and Manhattan for failing to take adequate procedures to detect potential money laundering by clients, such as screening people creating accounts and monitoring transactions for evidence of wrongdoing.

The bank and its employees have not been charged with any crime, and the probe may conclude without further action.

Silvergate Bank, which fell before Signature Bank, has been dropped by Coinbase and similar crypto firms as their provider after it reported that its ability to continue as a going concern is threatened by liquidity issues. The crypto firms shifted momentarily to Signature before its eventual collapse.


Information for this briefing was found via Bloomberg and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Leave a Reply

Video Articles

Alamos Gold Q1 Earnings: The Inside Scoop

Cerrado Gold Q4 Earnings: The Turnaround is Working

B2GOLD Q1 Earnings: Revenue Up, Production & Cash Flow Decline

Recommended

Canadian Copper: The $172M Combined Strategy PEA

ESGold Begins Concentration Tests Ahead Of First Production

Related News

Tether Revealed To Be Once Backed By Chinese Securities, So They Are Giving Away Tether Gold To Make Amends

Documents released by New York’s Attorney General reveal that Tether Holdings, the issuer of the...

Saturday, June 17, 2023, 09:09:13 AM

Crypto Firms Are Dropping Silvergate Bank, But Is Signature Bank Better?

Coinbase Global (NASDAQ: COIN) dropped Silvergate Capital (NYSE: SI) as a partner for Prime customers...

Friday, March 3, 2023, 10:45:03 AM

Tether Fined $41 Million Over Misleading Claims That Stablecoins Were Fully Backed by US Dollars

One week after Bloomberg spilled the beans that Tether may not actually have the $69...

Sunday, October 17, 2021, 02:51:00 PM

A Massive Ad Campaign Is Labeling Tether As “Tethered To Corruption”

Consumers’ Research, a prominent watchdog group, has launched a multi-million-dollar campaign targeting the stablecoin Tether...

Wednesday, June 19, 2024, 12:21:00 PM

Did Crypto.com Restrict Tether From Canadian Users?

Rumors have been circulating that Singapore-based crypto exchange Crypto.com has delisted Tether (USDT), including all...

Tuesday, January 10, 2023, 12:33:00 PM