Crypto exchange Gemini has released an official statement claiming that there are no funds stored in Signature Bank that support the Gemini US Dollar (GUSD) stablecoin, according to a March 13 tweet.
The exchange also detailed its partnership with Signature Bank, noting that they had been “incredible partners to Gemini and our industry for the better part of a decade.” It was clarified that current reserves are held exclusively at three US-based banks – State Street Bank, Goldman Sachs and Fidelity – and Gemini will continue to monitor all bank counterparties to ensure GUSD backing and customer funds are not impacted.
On March 13, Circle’s USD Coin (USDC) lost its peg in the secondary market due to the collapse of Silicon Valley Bank, sparking concerns about the same happening to GUSD and other stablecoins. USDC was able to regain its peg later that day.
Gemini reassured its customers that each GUSD coin is backed by dollar reserves, saying, “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.”
The series of bank failures began with Silvergate Bank, who agreed to “voluntarily liquidate” on March 8, followed by the shutdown of Silicon Valley Bank on March 10.
