A dozen more loans were extended to cryptocurrency businesses by Signature Bank under the Paycheck Protection Program (PPP) than was previously reported. Joseph DePaolo, the CEO, said that $1.9 billion had been issued in PPP loans and almost $20 million of it was given to nearly 40 companies in the digital asset space. He didn’t provide names of the firms who had been given these PPP loans and neither did he specify the exact number of companies that obtained loans through this relief program. The $1.9 billion loans by Signature are around 55% of the total $350 billion that was given through the U.S. Small Business Administration.
According to public records, the loans had been issued by Signature to several prominent companies, which included VC firm Polychain Capital, crypto lending company Celsius Network and Ethereum venture studio ConsenSys. As per DePaolo, the high crypto PPP loan volume was because the other banks that had been serving crypto companies just didn’t have the resources to offer a similar program.
Previously, it had been reported that about $30 million had been given to crypto companies by a number of banks, which included Silicon Valley Bank, JPMorgan Chase, Cross River Bank, and others. It had also been reported that only nine PPP loans had been made by Signature to crypto firms at that time.
The latest news indicates that there is a deeper requirement for relief in the crypto industry in the wake of the global economic crisis that had occurred as a result of the COVID-19 pandemic. Similarly, the program initiated by Signature highlights its commitment to the digital asset industry. Even though Signature doesn’t refer to itself as a crypto bank or use the term crypto banking division for their digital assets team and their business is mostly focused on serving high-net-worth individuals, the bank did receive deposits worth $1 billion from the sector in the second quarter of this year alone.
DePaolo said that nearly a year and a half ago, it was said that if you didn’t become part of the digital world and blockchain technology within 5 years, you would be unable to function. He stated that due to the pandemic and the global crisis that has occurred as a result, people would turn towards digital currencies much sooner. Joseph Siebert had been hired by the bank in January 2018 to serve as the senior vice president of their digital asset banking team.
He began with three employees, but as of August 2020, his team comprises of 12 members. He had previously served as vice president of Metropolitan Commercial bank, another crypto-friendly institution. The Signet payments platform of the bank is a proprietary blockchain, which is based on the Ethereum protocol and allows instant and fee-less fiat settlement. It is certainly popular in the digital asset industry, but even companies in other industries like renewable energy companies, make use of Signet for settling thousands of transactions on a daily basis without having to deal with any payment friction between wholesale distributors and suppliers.