The United States Federal Deposit Insurance Corporation (FDIC) has announced that Signature Bank customers who hold crypto accounts have until April 5, 2023, to withdraw their funds and find another banking option or risk closure of their accounts.
Customers were advised to verify the address listed on their registration is up-to-date to ensure successful withdrawal of funds. In the event that a depositor’s account is closed, a check will be mailed to their registered address.
According to a Bloomberg report on March 28, 2023, a representative from the United States Federal Deposit Insurance Corporation (FDIC) stated that the regulatory agency was reaching out to depositors of Signature Bank whose deposits were not covered under Flagstar Bank’s offer to confirm that those deposits belonged to clients of digital asset companies.
On March 19, 2023, Flagstar Bank, a unit of New York Community Bancorp (NYCB), acquired the majority of the deposits and loans held by Signature Bank. Under the agreement with the FDIC, Flagstar Bank received all 40 of Signature Bank’s former branches and retained $4 billion in deposits and almost $60 billion in loans from Signature Bank.
Signet, Signature Bank’s blockchain-based payments platform that allows for unrestricted real-time payments, was excluded from the Flagstar Bank’s agreement.
Today, we entered into an agreement with a subsidiary of New York Community Bancorp, Inc., to purchase and assume deposits and assets out of Signature Bridge Bank. Read more ➡️ https://t.co/bSshY93lBh. pic.twitter.com/b9RBvYtGF7
— FDIC (@FDICgov) March 19, 2023
Signature Bank was closed down by New York regulators on March 12, 2023, due to concerns of a bank run and systemic risk to the American economy. The FDIC assumed responsibility for managing its assets and properties.
The FDIC solicited bids from banks interested in acquiring Signature’s assets, with a deadline of March 17, 2023. However, the agency only considered bids from entities with an active bank charter. The FDIC also reportedly stated that any bank or investor that wishes to acquire Signature Bank must agree to discontinue all the bank’s cryptocurrency-related activities.
Meanwhile, a CNBC report revealed that Signature bank was investigated for alleged money laundering before its collapse. Investigators from the Justice Department in Washington and Manhattan examined whether the bank took adequate measures to identify possible cases of money laundering by customers. The investigation included vetting account applicants and monitoring transactions for any suspicious activity.
According to the report, the US Securities and Exchange Commission (SEC) was also monitoring the bank’s operations. However, no details were prov+
ided regarding the nature of the SEC’s investigation.
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