FDIC gives Signature’s crypto clients account deadline
New York Community Bancorp assumed most of Signature Bank’s deposits and some of its loans earlier this month, but not the crypto assets
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Customers who had deposits at Signature Bank are facing a deadline concerning their crypto assets.
The Federal Deposit Insurance Corp. (FDIC) has told crypto clients with deposits at the failed bank that they are facing a deadline to close their accounts and move their money, according to Bloomberg.
New York Community Bancorp assumed most of Signature Bank’s deposits and some of its loans earlier this month through its Flagstar Bank subsidiary.
But that deal didn't include about $4 billion of deposits related to Signature’s digital-assets banking business, according to the FDIC.
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Signature Bank logo displayed on a phone screen and representation of cryptocurrency are seen in this illustration photo. (Jakub Porzycki/NurPhoto via Getty Images / Getty Images)
"We are reaching out to the depositors from Signature whose deposits were not included in NYCB’s bid," an FDIC spokesperson told Bloomberg.
Depositors have been told that any accounts not closed by April 5 will be automatically shut and depositors will receive a check in the mail.
Signature failed following the demise of Silvergate Capital which also catered to the crypto industry, and Silicon Valley Bank.
After 40 years, Silicon Valley Bank, the nation’s 17th largest, was shut down by the FDIC as regulators moved to protect customers as it faced a liquidity crunch after losing $2 billion.
It became the largest bank failure since the financial crisis.
In this photo illustration, the Flagstar Bank logo is seen in the background of a silhouetted woman holding a mobile phone. (Rafael Henrique/SOPA Images/LightRocket via Getty Images / Getty Images)
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Signet, Signature’s real-time payments network that’s widely used by crypto participants, had remained under the FDIC’s receivership following the NYCB deal, which raised questions about the fate of the business.
U.S. prosecutors were investigating Signature Bank’s work with crypto clients before the lender’s sudden collapse, Bloomberg has reported.
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Federal Deposit Insurance Corporation (FDIC) building is seen in Virginia, United States on March 17, 2023. (Celal Gunes/Anadolu Agency via Getty Images / Getty Images)
Justice Department investigators in Washington and Manhattan were examining whether the New York bank took sufficient steps to detect potential money laundering, such as monitoring transactions for signs of criminality.
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The Securities and Exchange Commission was also looking into it, according to people familiar with the situation.