Signature Bank Closure Tests Signet Platform Resilience as Crypto Clients Adapt

When New York regulators moved to close Signature Bank in March 2023, they triggered a cascade of uncertainty across the cryptocurrency industry. However, according to sources familiar with the situation, the Signet platform—the bank’s proprietary real-time payment system—has maintained its operational status despite the institutional upheaval. The question now isn’t whether Signet continues functioning, but rather whether the industry’s confidence in centralized banking infrastructure for crypto has been irreparably damaged.

The Technical Foundation Behind Signet’s Continuity

Signet launched on January 1, 2019, as a blockchain-based digital payments platform specifically engineered for institutional cryptocurrency transactions. The platform gained prominence after its 2020 integration with Fireblocks, a leading digital asset custodian, which enabled secure movement, storage, and issuance of digital assets. When Signature Bank’s assets transferred to Signature Bridge Bank—an interim entity temporarily operated by the Federal Deposit Insurance Corporation (FDIC)—the technical infrastructure supporting Signet remained intact. Fireblocks CEO Michael Shaulov confirmed to industry observers that Signet “looks like it’s technically working,” with no changes required on Fireblocks’ end.

A Coinbase spokesperson later verified that “as of Tuesday, Signet continues to function and all past and future customer deposits continue to be FDIC-insured,” underscoring the regulatory protections surrounding the platform despite the parent bank’s closure.

Silvergate’s Liquidation Sets Context for Signature’s Challenge

The Signature Bank shutdown cannot be understood in isolation. Just days earlier, Silvergate Bank—another crypto-friendly financial institution—had voluntarily liquidated its operations, taking its Silvergate Exchange Network (SEN) with it. SEN had been one of the few alternatives offering 24/7 crypto settlement capabilities, similar to what Signature provided through Signet.

Silvergate’s demise had already left the industry scrambling for alternatives. The Signature Bank closure compounded this challenge, momentarily appearing to eliminate one of the last remaining 24/7 crypto banking options. Yet the revelation that Signature Bridge Bank would continue operations, with Signet remaining functional, provided a crucial lifeline for institutional customers who depended on the platform’s round-the-clock settlement capabilities.

How Major Crypto Firms Responded to the Signature Disruption

Despite official assurances, several major cryptocurrency firms took immediate steps to diversify away from Signature-dependent infrastructure. Circle, the issuer of USDC stablecoin and a Signature Bank client, announced it would rely on settlements through BNY Mellon, a traditional banking partner, while also bringing on “a new transaction banking partner with automated minting and redemption.” CEO Jeremy Allaire revealed that Circle had been unable to use Signet for token minting and redemption during the transition period.

Coinbase, the publicly traded cryptocurrency exchange, emphasized business continuity while simultaneously highlighting its redundancy strategy. According to Natasha LaBranche, the company’s senior manager of corporate communications, “Coinbase continues to operate as usual” and maintains USDC conversions available 24/7/365. More tellingly, Coinbase’s help section lists four FDIC-insured banking partners—Signature Bank, JPMorgan Chase, Cross River Bank, and Pathward—indicating the exchange had already built contingency protocols into its operations.

The Deeper Implications for Crypto Banking Infrastructure

The Signature Bank episode revealed a fundamental vulnerability in the crypto industry’s reliance on specialized financial institutions. While Signet technically continues to function, the platform’s operational status became secondary to a more pressing question: should the industry depend on single-point-of-failure banking relationships?

Coinbase’s statement that “we do have contingency plans and redundant payment rails to ensure we could continue to serve our clients” reflects a hard-won lesson. The near-simultaneous challenges facing both Silvergate and Signature Bank exposed how concentration risk in crypto-friendly banking creates systemic fragility.

As the industry moves forward, institutional cryptocurrency firms appear committed to building multi-banking relationships rather than relying on Signet or any single platform. This shift toward distributed banking relationships may ultimately strengthen crypto’s operational resilience, even if it complicates the immediate settlement landscape for institutional players.