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The closure of Signature Bank, a lender that counted a number of crypto companies as customers, marks another major setback for digital assets as the industry becomes ever more cut off from the banking system, Bloomberg News reported. The Treasury Department said Signature Bank was closed by New York state regulators Sunday and that depositors will have access to their money on Monday. The shutdown comes soon after the twin collapses of Silvergate Capital Corp. and Silicon Valley Bank. All the banks were, at least at one point, counted among the U.S.’s most crypto-friendly financial institutions. Signature had begun a pull back from digital assets in the wake of the blowup of the FTX exchange but still had $16.5 billion in crypto-related client deposits as of March 8. Signature and Silvergate also enabled fast payments between customers like hedge funds and exchanges, supporting digital-asset liquidity. Coinbase Global Inc., the U.S.’s biggest crypto exchange, said on Friday night that it had a $240 million balance at the bank. Paxos Global, which had previously partnered with Binance on the BUSD stablecoin, said it had $250 million at Signature. In the tweet, Paxos said it “holds private deposit insurance well in excess of our cash balance and FDIC per-account limits.”

The U.S. Department Justice has appealed a court order approving Voyager Digital's bankruptcy plan, creating a new hurdle for the crypto lender's plan to sell its assets and transfer its customers to Binance.US in a deal valued at $1.3 billion, Reuters reported. The U.S. Attorney's Office for the Southern District of New York and the Office of the U.S. Trustee, the Department of Justice's bankruptcy watchdog, filed a notice of appeal late Thursday in U.S. bankruptcy court in Manhattan. It did not detail why they were appealing. Bankruptcy Judge Michael Wiles, who is overseeing Voyager's chapter 11 bankruptcy process, had approved Voyager's restructuring plan, which is built around the acquisition by crypto exchange Binance.US, at a hearing on Tuesday after overruling objections from the U.S. Securities and Exchange Commission and DOJ. Lawyers for the U.S. Trustee and U.S. Attorney's office spoke up at hearings to consider Voyager's bankruptcy plan to oppose provisions Voyager included to protect employees from potential legal claims resulting from actions taken during the bankruptcy. They argued that Wiles' order approving the plan was written too broadly, potentially preventing the government from bringing regulatory enforcement actions or criminal charges if misconduct was discovered later. Judge Wiles disagreed, saying that Voyager and its employees should not be penalized for carrying out a court-approved sale to Binance.US. If the DOJ or any government agency had evidence of misconduct specifically related to the bankruptcy, they should have presented it in court, Judge Wiles said.

A major cryptocurrency operated by Circle Internet Financial Ltd. meant to mimic the value of the U.S. dollar dropped sharply after the company said it had $3.3 billion tied up in the collapsed Silicon Valley Bank, the Wall Street Journal reported. USD Coin fell below 87 cents on Saturday morning, according to data from CoinDesk. The virtual currency, known as a stablecoin, is designed to trade exactly at $1. It is backed by real U.S. dollars and short-term government debt, and sits at the heart of cryptocurrency trading. Breaking USD Coin’s peg with the dollar has the potential to send shock waves through the cryptocurrency world still reeling from the collapse of FTX. For crypto traders, the decline in the value of USD Coin is reminiscent of the worst moments of the 2008 financial crisis when the Reserve Primary Fund, a money-market fund that most investors treated as the equivalent of cash, “broke the buck” in the wake of Lehman Brothers’ failure and saw its net asset value fall below $1. Stablecoins such as USD Coin have become an increasingly critical part of the digital-asset ecosystem, accounting for over $130 billion in market value, up from just $11 billion in June 2020. Crypto traders rely on stablecoins to quickly get in or out of their positions in more volatile cryptocurrencies, while companies often store their capital and profits in stablecoins.

The Diocese under the Roman Catholic Bishop of Santa Rosa will be filing for bankruptcy Monday due to the large number of lawsuits filed against it from people who allege they were sexually abused, Bishop Robert Vasa said Friday, Patch.com reported. The lawsuits came in the wake of a three-year window declared by Gov. Gavin Newsom beginning in 2020 and ending on Dec. 31, 2022, that overruled the normal statute of limitations and opened the floodgates for litigation. According to the Catholic News Agency, Newsom's move allowed for suits to be brought that have gone back up to 75 years. For the Santa Rosa Diocese, the number of suits could be as many as 200, with 115 dating back more than 30 years. "These cases are too numerous to settle individually and so they have accumulated until the closing of the three-year window," Vasa said on Friday in his statement. "Now that the window is closed, we have received notice of at least 160 claims and we have information that perhaps more than 200 claims have been filed in total against the Diocese."

Federal appeals court judges in Washington, D.C., grilled the U.S. Securities and Exchange Commission on its decision to reject a proposed Bitcoin exchange-traded fund when it had earlier approved a similar product based on Bitcoin futures, Bloomberg News reported. Grayscale Investments LLC wants to convert its $14 billion Bitcoin trust, the largest investment vehicle tied to the No. 1 cryptocurrency, into an ETF. But the SEC rejected the plan in June, saying crypto markets are too ripe for fraud and manipulation. Grayscale sued, asking the DC Circuit Court to overturn a decision the company called arbitrary and discriminatory because the SEC had already approved ETFs that track Bitcoin futures. Chief Circuit Judge Sri Srinivasan, one of three on the appellate panel, asked during a hearing Tuesday why it wouldn’t always be the case that manipulation of the spot Bitcoin market would show up in futures. “It is just going to follow like the night follows the day,” Srinivasan said while questioning an SEC lawyer. Some of the judges pushed the SEC to explain why Grayscale is wrong to argue the risks of fraud and manipulation in the spot Bitcoin and Bitcoin futures markets are the same because they both rely on the same underlying pricing.

Revlon Inc. is grappling with a growing number of allegations that some of its hair products cause cancer as the cosmetics company looks to exit chapter 11 protection, Bloomberg News reported. Thousands of consumers are alleging Revlon owes them money because they used the company’s hair relaxer products and later developed cancer. But a deadline to formally lodge such claims against the bankrupt company elapsed in October — just after the National Institutes of Health published a study showing a correlation between some chemical hair relaxers and uterine cancer. On Tuesday, Revlon’s bankruptcy judge extended the deadline by which customers with certain types of cancer can file claims against the company. They now have until April 11, which will also allow them to vote on the bankrupt company’s restructuring plan later this month. “What we’ve got here in my view is a mass tort in the making,” said Sander Esserman, an attorney who spoke on behalf of various cancer claimant groups during the Tuesday bankruptcy hearing. “It’s a dynamic situation, and there will no doubt be many cases in the future as they continue to market and the women develop various forms of cancers that are contestable.” Robert Britton, an attorney representing Revlon, said the company disputes any link between cancer and its hair relaxer products. He added that the exponential growth of claims in a matter of weeks suggests that more vetting of the claimants might be needed.

A plan for the owner of a senior living community in Plano, Texas, to emerge from bankruptcy faces a creditor vote this month, a confirmation hearing in April, and opposition from the trustee for nearly $66.8 million of defaulted revenue bonds, The Bond Buyer reported. BSPV-Plano, LLC, a Texas limited liability company, filed the chapter 11 case in the U.S. Eastern District of Texas Bankruptcy Court in March 2022 after Bridgemoor at Plano, its 318-unit rental project, was beset with problems. Bond trustee The Huntington National Bank said that Bankruptcy Judge Brenda Rhoades approved the company's disclosure statement Feb. 24 despite its opposition and that it expects to file an objection to the plan's confirmation on or before March 29, according to a notice to bondholders posted Monday on the Municipal Securities Rulemaking Board's EMMA website. A court hearing on the plan's confirmation is scheduled for April 13 and 14.

U.S. regulators won’t be allowed to punish executives or advisers involved in the bankruptcy of Voyager Digital Ltd. for creating a new cryptocurrency that would help repay customers of the failed digital asset lender, a judge said yesterday, Bloomberg News reported. The comments by Bankruptcy Judge Michael Wiles reflect a growing conflict between efforts to rehabilitate troubled crypto companies and an increased regulatory push by the Securities and Exchange Commission. SEC lawyers have opposed a legal protection typically given to executives and restructuring advisers of a bankrupt company. The protection blocks lawsuits against those professionals for implementing a court-approved bankruptcy plan. The SEC’s position would “leave a sword hanging over the heads of anybody who’s going to do this transaction,” Judge Wiles said. “How can a bankruptcy case or any court proceeding function with that kind of suggestion?” Judge Wiles’s remarks came during the third day of debate over a plan by Voyager to issue a new cryptocoin and sell itself to Binance.US, the US arm of the world’s biggest crypto exchange. SEC lawyers argue that the proposals likely will violate federal law because, in their view, the new coin is an unregistered security and Binance.US is operating an unregulated securities exchange. SEC lawyer Therese A. Scheuer argued that the legal protections are so broad that Voyager employees and lawyers would have permission to violate securities laws. After several minutes of debate, Voyager lawyers agreed to change the plan to narrow the legal releases.

Alameda Research, the trading arm of the bankrupt digital-asset exchange FTX, has filed a lawsuit against Grayscale Investments alleging “exorbitant management fees” and accusing Grayscale of “improperly preventing redemptions” from the Bitcoin and Ether trusts it manages, Bloomberg News reported. “We will continue to use every tool we can to maximize recoveries for FTX customers and creditors,” John J. Ray III, chief executive officer and chief restructuring officer of the FTX Debtors, said in the statement. “Our goal is to unlock value that we believe is currently being suppressed by Grayscale’s self-dealing and improper redemption ban.” A spokesperson for Grayscale said the lawsuit was “misguided”: “Grayscale has been transparent in our efforts to obtain regulatory approval to convert GBTC into an ETF — an outcome that is undoubtedly the best long-term product structure for Grayscale’s investors. We remain confident in the common sense, compelling legal arguments that will be argued tomorrow before the D.C. Court of Appeals.” For two years, the $14.8 billion Grayscale Bitcoin Trust (ticker GBTC) has been trading at a steep discount to the cryptocurrency it holds. The group of FTX debtors said they are seeking injunctive relief to unlock $9 billion or more in value for shareholders of the two Grayscale trusts.

A long road lies ahead to repair confidence in crypto after unprecedented bankruptcies and hacks, including the major challenge of giving investors a way of insuring against such events, Bloomberg News reported. Stock brokerage accounts often come with some cover against outcomes like bankruptcy but digital-asset platforms provide few if any shields, a reality underlined by the November collapse of Sam Bankman-Fried’s FTX exchange. Investors seeking such policies face a tough task. Traditional insurers are wary and crypto-native solutions in decentralized finance — or DeFi — account for a fraction of the $1.1 trillion digital-asset sector. For instance, funds locked in DeFi insurance protocols amount to about $300 million, compared with more than $80 billion in DeFi services overall, according to data from DeFiLlama. “Last year highlighted the importance of insurance but it seems a very difficult problem for DeFi to solve,” said Riyad Carey, a research analyst at crypto data provider Kaiko. “To properly protect a protocol or position is challenging.” The largest DeFi insurance provider is Nexus Mutual, a member-based service accounting for about 70% of funds locked in crypto-native insurance protocols. Nexus Mutual has paid out roughly $5 million in claims from the bankruptcies of FTX and crypto lender BlockFi. It expects to pay another $2 million but those figures are dwarfed by the billions of dollars eviscerated by FTX alone.