Breaking: Signature Bank, cryptocurrency-enabled, shut down by New York authorities

[ad_1]

New York authorities closed Signature Bank, which closed in the red on Friday. Silicon Valley Bank customers will get their deposits back in full, with withdrawals opening Monday.

While the crypto market is still grappling with the collapse of the crypto-centric bank – Silvergate Bank, another bank has had its shop closed. In a statement released today by the Federal Reserve Board of Governors, New York authorities closed Signature Bank. In particular, Federal Reserve Board governors assured that deposits made at the bank would be returned in full to customers.

The ad read,

“We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state charter authority. All depositors of this institution will be made whole. As with the Silicon Valley Bank resolution, no loss will be borne by the taxpayer.

Several crypto entities, including issuer USDC – Cirlce, have taken advantage of Signature Bank’s services. In its latest statement, Circle said it used Signature Bank to handle transactions and settle USDC accounts. With that bank also excluded, the stablecoin issuer is now just Customers Bank, which holds $1 billion of its cash reserves. Other crypto clients included Coinbase, LedgerX, and the now-collapsed crypto exchange, FTX.

Additionally, the bank had the largest crypto exchange – Binance – was also on Signature Bank’s client list. However, the bank had raised the bar for USD transactions to a minimum of $100,000 for Binance users. The move was reportedly the result of the bank’s attempt to reduce its exposure to the crypto market. However, the exchange finally announced the temporary suspension of USD deposits and withdrawals.

Notably, the crypto-friendly bank closed the market in the red on Friday, with its shares falling nearly 32%. The bank’s problems began when Silvergate Bank announced that it would cease operations. The problems doubled after the failure of the tech-focused bank – Silicon Valley Bank.

End for Signature bank but relief for Silicon Valley Bank

Additionally, federal governors have proposed a resolution for the bankrupt Silicon Valley Bank. According to the statement, Secretary of the Treasury – Janet L. Yellen has “approved actions allowing the FDIC to complete its resolution of Silicon Valley Bank.”

The resolution fully covers all depositors and they would have access to their funds from Monday i.e. March 13, 2023. Moreover, the statement assured that losses incurred in this process will not be borne by taxpayers. Notably, this could mean that Circle would recover its $3.3 billion locked in the bank, along with Ripple.

The statement also read,

“Actions to protect the US economy by strengthening public confidence in our banking system. This step will ensure that the U.S. banking system continues to play its vital role of protecting deposits and providing access to credit to households and businesses in a way that supports strong and sustainable economic growth.

[ad_2]