Regulatory bodies to close accounts of Signature bank’s Crypto clients

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On 28 March, the United States Federal Deposit Insurance Corporation(FDIC) released a statement for the collapsed Signature bank’s Crypto clients. The spokesperson of FDIC informed that they are reaching out to customers whose funds have not been included in the bid of New York Bancorp(NYBC). 

The United States has faced the second biggest banking sector turmoil after the 2008 financial crisis. Three banks, the Silicon Valley Bank, the Silvergate bank, and the Signature bank collapsed earlier this month. The Signature bank is considered a crypto-friendly bank filed for bankruptcy on 12 March. 

On 19 March, in the statement released by the Federal Deposit Insurance Corporation, it was mentioned that 40 branches of the collapsed bank will operate under NYBC Flagstar bank from 20th March. However, in the bid made by Flagstar bank, $4 billion in deposits of the former Signature bank’s digital assets banking division were not included.

Now Signature bank’s cryptocurrency clients are asked to transfer their funds to another bank. Additionally, if they are not able to transfer their funds from the bank until 5 April, the account will be closed by regulatory bodies. As of December 2021, Signature bank has total deposits of $88.6 billion and total assets of $110.4 billion.

The 40 branches of the Signature bank started operations as Flagstar bank on 20 March but this transfer of accounts didn’t include digital assets. However, the FDIC has assured that they will directly transfer these deposits to clients who have digital banking accounts. Earlier, the interested parties were asked to submit their proposal to acquire the Signature bank by 17 March. 

The FDIC has provided ample time to move its digital assets from the collapsed bank. If the clients will not be able to transfer the funds to another bank, the Federal Deposit Insurance Corporation will send a mail check to the address mentioned in the records. 

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