Cryptocurrency exchange Kraken is stepping away from Signature Bank for processing certain transaction types due to decisions made by the New York-based banking firm.
From now on, non-corporate clients cannot deposit or withdraw dollars from Kraken through Signature.
- As reported by Bloomberg Law on Wednesday, deposits to Kraken using Signature will cease on March 15, while customers have until March 31 to withdraw from the company.
- The news comes after Signature Bank warned its banking partners in January that it would stop helping its crypto exchange customers process transactions worth less than $100,000. This rule applied to both Binance and Kraken.
- Signature noted in December that it would start reducing its exposure to the crypto industry, one month after FTX’s bankruptcy sparked rampant contagion across the sector.
- One such firm is Silvergate Bank, which suffered a bank run in the weeks after FTX’s collapse. The firm is being investigated by US regulators due to certain ties it had with both FTX and its sister firm, Alameda Research.
- On Thursday, Silvergate noted that it was experiencing operational issues, and that it wouldn’t be able to release its financial report scheduled for March 16. Its shares are down 58% on the day.
- Numerous crypto companies have proceeded to cut ties with Silvergate in the aftermath, including Paxos, Galaxy Digital, Gemini, BitStamp, and Circle.
- Coinbase and LedgerX also distanced themselves from the firm, each replacing Silvergate with Signature Bank.