Signature Bank Sold without the Cryptocurrency Part

Signature Bank Sold without the Cryptocurrency Part

The US Federal Deposit Insurance Corporation (FDIC) has sold the business of Signature Bank, with the exception of its cryptocurrency part. Starting March 20, 40 units of Signature Bank will be operated by Flagstar Bank, owned by New York Community Bancorp, the regulator said in a press release.

As of the end of 2022, Signature Bank had total deposits of $88.6 billion and total assets of $110.4 billion. As of the end of September last year, almost a quarter of deposits in Signature were in the cryptocurrency sector.

According to the purchase agreement, non-cryptocurrency deposits and part of the loan portfolios belonging to the closed bank Signature are transferred under the management of Flagstar Bank. Signature contributors – with the exception of those associated with the digital asset business – automatically become Flagstar contributors. According to the announcement, their funds will continue to be insured by the FDIC up to the insurance limit.

Flagstar Bank’s bid to purchase Signature assets did not include approximately $4 billion in deposits related to Signature’s digital business. According to the press release, the FDIC will directly provide access to these funds to their owners.

As part of the deal, Flagstar Bank acquired approximately $38.4 billion of Signature’s assets, including $12.9 billion in loans purchased at a $2.7 billion discount. The announcement said approximately $60 billion of Signature’s loans would remain under FDIC control.

Previously, the media reported that the buyer of Signature Bank would have to stop working with cryptocurrency companies. However, the FDIC has denied this information, saying that it will not require the withdrawal of cryptocurrency activities as part of any transaction to sell the bank’s assets.

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