Tether Clients Access US Banking System with Signature Bank

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• Tether reportedly allowed its clients to send funds through Signature Bank’s payments platform, granting it access to the US banking system.
• New York regulators took control of Signature in March and it is unclear if Tether disclosed its banking arrangements with the firm.
• US lawmakers are currently looking into the collapse of the crypto-friendly bank, which was the third in a chain starting with Silvergate and Silicon Valley.

Tether Accessed U.S Banking System

Stablecoin issuer Tether reportedly allowed its clients to send funds through Signature Bank’s payments platform, granting it access to United States banks. At the time New York regulators took control of Signature in March, there was reportedly a system in place for Tether clients to send dollars through the bank’s Signet platform.

Potential High Risk Practices

While this arrangement between Tether and Signature would not have been illegal, failing to disclose such information to the investing public may suggest high-risk practices. According to a Tether spokesperson, banks used by the stablecoin issuer “always had access to several banking channels and counterparties,” and associate entities “wouldn’t be affected by either direct or indirect exposure to Signature.”

Signature Shutdown By NYDFS

The New York Department of Financial Services announced the shutdown of Signature on March 12, saying at the time that this decision had been made with Federal Deposit Insurance Corporation (FDIC) in an effort to “protect U.S economy.” Stablecoin issuer Paxos reported at that time it had $250 million tied to Signature while Tether’s chief technology officer Paolo Ardoino said that firm did not have any exposure related with failed bank.

U.S Lawmakers Investigating Collapse Of Crypto Friendly Banks

U.S lawmakers continue their investigation into collapse of crypto friendly bank which was third in chain starting from Silvergate and Silicon Valley banks. During hearing of Senate Banking Committee held on March 28th FDIC chair Martin Gruenberg said that signature has not adequately managed traditional banking activities as they supposed too including credit exposures liquidity risk management cyber security compliance and others .

Conclusion

Tether accessed US Banking system using signature’s payment platform without disclosing details publicly which could indicate risky practices being used by them . US Lawmakers investigating into collapse of signature which is 3rd crypto friendly bank in chain started from Silvergate & silicon valley banks .