Gemini claimed to have had a relationship with Signature in the past, but added that it no longer has any funds there.
According to an official tweet from the company, Gemini had no cash at Signature Bank and its Gemini US Dollar (GUSD) stablecoin was not secured by any deposits at the bankrupt bank.
The statement: “They [Signature] have been incredible partners to Gemini and our industry for the better part of a decade.” was added to the exchange to further clarify that it has previously partnered with Signature.
But, according to the exchange, only three United States banks—State Street Bank, Goldman Sachs, and Fidelity—hold all of the existing reserves. In order to ensure that customer funds and the GUSD backing are not harmed, the business also claimed that it is continually monitoring bank counterparty risk.
Due to the effects of the Silicon Valley Bank collapse, Circle’s USD Coin (USDC $1.00) lost its peg on March 13 on the secondary market, sparking rumors that GUSD and other stablecoins would follow suit. On March 13, USDC regained its peg. Each GUSD coin is backed by dollar reserves, the crypto exchange highlighted, adding:
“As a reminder, Gemini is a full-reserve exchange and custodian. This means that all customer funds and Gemini dollar reserves are held 1:1 on Gemini and are available for withdrawal at any time.”
A wave of bank failures that swept the United States in early March included the collapse of Signature. On March 8, Silvergate Bank announced it would “voluntarily dissolve,” and on March 10, Silicon Valley Bank closed.
