Clients of Signature Bank who use cryptocurrency must find a new banking partner and close their accounts by April 5.
The Financial Institution Deposit Corporation (FIDC) made a decision on Tuesday to allow Flagstar Bank, a part of the New York Community Bancorp (NYCB), to take over Signature Bank’s deposits and loans.
However, the agreement with the FIDC did not include Signature Bank’s $4 billion in deposits used for their digital banking business or their blockchain-based real-time payments platform, Signet, which is popular among crypto companies.
The US government recently bailed out crypto companies with deposits at Signature Bank, which suddenly closed its doors earlier this month. Coinbase, a crypto exchange, had $240 million with the bank and the stablecoin issuer Circle had $250 million.
Now, the companies must find new banks to store their money since traditional banks are often wary of cryptocurrencies. The New York state regulator, the Department of Financial Services, took control of the bank to protect depositors. The US government then created a temporary lender so that customers could access their funds.
Signature Bank had around $110.36 billion in assets and $88.59 billion in deposits as of the end of 2022. Flagstar Bank purchased all of the deposits, as well as some of the loans, and took over all 40 branches. The Federal Deposit Insurance Corporation (FDIC) took control of $40 billion in Signature Bank’s loans and $4 billion in deposits that were not part of the agreement.
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