Just a week after his bankruptcy, Signature Bank deposits and loans will be sold to Flagstar Bank, a subsidiary of New York Community Bancorp, but cryptocurrency-related deposits will not be part of the deal.
The United States Federal Deposit Insurance Corporation announced the agreement on March 19, whereby $38.4 billion in non-cryptocurrency-related deposits and $12.9 billion in loans will go to the Michigan-based bank under a “purchase and assumption agreement.”.
Starting March 20, Signature’s Bank 40 branches will begin operating as Flagstar Bankwhere all deposits assumed by Flagstar Bank will continue to be insured up to the $250,000 insurance limit.
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
Today we have entered into an agreement with an affiliate of New York Community Bancorp, Inc. to purchase and assume the deposits and assets of Signature Bridge Bank. Read more at ➡️ https://t.co/bSshY93lBh. pic.twitter.com/b9RBvYtGF7
The Flagstar Bank acquisition agreement did not include approximately $4 billion of deposits held by the Signature Bank digital assets. Instead, the FDIC confirmed that it would transfer these deposits directly to customers who opened a digital bank account, stating:
“The FDIC will provide these deposits directly to customers whose accounts are associated with the digital banking business.”
The figure of USD 4,000 million is equivalent to 4.5% of the total USD 88.6 billion in deposits that Signature Bank had as of December 31.
Coinbase, Celsius, and Paxos are three cryptocurrency firms that recently confirmed having some exposure to Signature Bank..
Last week, a March 17 Reuters report cited two sources as suggesting that any Signature buyers would be required to divest from cryptocurrency activities as part of a potential bailout plan.
At the time, an FDIC spokesperson denied this, noting that the agency did not require cryptocurrency divestment as part of any sale..
Castle Island Ventures partner, Nic Carter, believes that the latest announcement shows that the FDIC “lied” in its response to Reuters.
Wow. Wow. the FDIC lied and Reuters was correct. I’m shocked. Shocked I tell you. This is the same FDIC chair who presided over Choke Point 1.0 by the way. pic.twitter.com/CHu8MgSW4X
— nic carter (@nic__carter) March 20, 2023
Oh. Wow. the FDIC lied and Reuters was right. I’m surprised. Shocked I tell you. This is the same FDIC Chairman who chaired Choke Point 1.0 by the way. pic.twitter.com/CHu8MgSW4X
The takeover comes after Signature Bridge Bank was created by the FDIC on March 12, after the New York Department of Financial Services closed the bank and appointed the FDIC as its receiver..
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Keep reading:
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.