In keeping with an official tweet from the corporate on March 13, crypto trade Gemini had no funds at Signature Financial institution and its stablecoin Gemini US Greenback (GUSD) was not backed by deposits on the failed financial institution.

1/ It is extremely unhappy to listen to the information about Signature Financial institution. They’ve been unimaginable companions to Gemini and our business for nearly a decade.

We now have zero consumer funds and 0 Gemini Greenback (GUSD) funds with Signature Financial institution.

— Gemini (@gemini) March 13, 2023

The trade additional clarified that it had labored with Signature prior to now, stating, “You [Signature] have been unimaginable companions to Gemini and our business for practically a decade.” Nonetheless, all present reserves are held at solely three United Stat banks — State Avenue Financial institution, Goldman Sachs and Constancy — Gemini stated.

The corporate additionally acknowledged that it actively screens banks’ counterparty danger to make sure buyer funds and GUSD help aren’t compromised.

On March 13, Circle’s USD Coin (USDC) misplaced its peg within the secondary market as a result of fallout from the collapse of Silicon Valley Financial institution, resulting in hypothesis that GUSD and different stablecoins may additionally lose their peg. USDC regained its bond on March 13.

Emphasizing that every GUSD coin is backed by dollar reserves, Gemini acknowledged:

“As a reminder, Gemini is a full reserve trade and custodian. Which means that all buyer funds and Gemini dollar reserves are held 1:1 on Gemini and can be found for withdrawal at any time.”

Signature’s collapse was a part of a sequence of financial institution failures that swept the US in early March. Silvergate Financial institution agreed to a “voluntary liquidation” on March eighth, adopted by the closure of Silicon Valley Financial institution on March tenth.