Coinbase and Circle cite FDIC to ensure fund recovery
Signature Bank and then Silicon Valley Bank, the traditional banking system, is experiencing one of the worst hit crises that have left customers wondering if they will ever get their funds back. For now, Coinbase has responded, saying that its users will get the funds back from Signature Bank, which is reportedly holding $240 million in corporate cash. Silvergate Bank has collapsed, too; however, there is a surety that Coinbase will recover funds.
Per the FDIC’s statement, the Corporation has announced a risk exception for all the banks that have fallen, adding that depositors will be made whole, similarly for Silicon Valley Bank, where taxpayers will not bear any loss.
Founded in 2012, Coinbase has over 3,000 cryptocurrencies listed on the platform. This makes it one of the most attractive platforms for users. They get a wide choice along with 150+ trading pairs to choose from. As a matter of fact, Coinbase is often considered to be the entry point of new users to the world of cryptocurrency. Our full review on coinbase exchange sheds more light on this aspect.
Coinbase has stated that all client funds will remain safe and accessible. Circle going bust has also caused panic among the customers. Circle has approximately $3.3 billion stuck at Silicon Valley Bank. A major portion of the USDC has been converted by its holders under the fear that the token would lose value considering the rate at which it is slipping away from the pegged US Dollar. CoinMarketCap shows the value of the USD Coin at $0.33.Nothing stopped customers from converting their holdings to any other digital asset, including BTC, one of the most volatile cryptocurrencies.
Mass conversions of USDC are expected to resume on Monday. Not just Coinbase but Paxos has also reported having $250 million stuck at Signature Bank. Paxos has done what Coinbase did, citing FDIC to reassure its customers of the safety of their funds. A sign of relief is Nansen announcing that Circle has minted $407 million USDC, making this the 7th largest mint by Circle.
Silicon Valley Bank, the second largest bank in the United States of America, earlier told its investors that it needed to raise $2.25 billion to shore up the balance sheet. That is when the downfall began, and customers began withdrawing their funds. Almost $42 billion had been withdrawn by the end of Thursday.
Other customers are facing a tough time with dark clouds of uncertainty over the thought of ever getting their funds back.
Silicon Valley Bank, Silvergate, and Signature Bank have gone down in the most unexpected ways. A lot of investors, including crypto platforms, are exploring options to recover funds that would otherwise be lost in a matter of time. FDIC has assured that taxpayers will not incur any loss, but a definite timeline for recovery is yet to be shared, adding a bit of worry among the customers.
