Gemini, a cryptocurrency exchange, made an official statement on March 13 via Twitter revealing that they had no funds deposited at Signature Bank. This means that their Gemini US Dollar (GUSD) stablecoin was not backed by any funds from the failed bank.
1/ It’s very sad to hear the news about Signature Bank. They have been incredible partners to Gemini and our industry for the better part of a decade.
We have zero customer funds and zero Gemini dollar (GUSD) funds held at Signature Bank.
— Gemini (@Gemini) March 13, 2023
Gemini clarified their past relationship with Signature Bank, acknowledging them as valuable partners over the years. However, they disclosed that all current reserves are now held at three other U.S. banks: State Street Bank, Goldman Sachs, and Fidelity.
The company reassured stakeholders that they are closely monitoring bank risks to safeguard customer funds and the backing of GUSD.
On the same day, concerns arose in the market when Circle’s USD Coin (USDC) temporarily lost its peg following the collapse of Silicon Valley Bank. This led to speculations about the stability of GUSD and other stablecoins. Nonetheless, USDC regains its peg the same day.
Gemini highlighted that each GUSD coin is fully backed by dollar reserves, underlining their commitment to being a full-reserve exchange and custodian. This ensures that all customer funds and GUSD reserves are maintained at a 1:1 ratio on Gemini, allowing for withdrawals at any time.
The closure of Signature Bank was part of a series of bank collapses in the U.S. during early March, with Silvergate Bank announcing voluntary liquidation on March 8, followed by the shutdown of Silicon Valley Bank on March 10.
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