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April 5 Deadline Set for Crypto Account Closures at Signature Bank

Finance Magnets | Arnab Shome  | Mar 29, 2023

Signature bank account closing - April 5 Deadline Set for Crypto Account Closures at Signature Bank

The Federal Deposit Insurance Corporation (FDIC) has asked cryptocurrency clients of collapsed Signature Bank to close their accounts by April 5 by finding another banking partner. Otherwise, the regulator will close the accounts and mail a check to the registered addresses.

  • The Federal Insurance Deposit Corporation (FIDC) has announced a deadline of April 5 for customers of Signature Bank's digital banking business to move their crypto-related deposits. This comes after Flagstar Bank, part of New York Community Bancorp (NYCB), acquired Signature Bank's deposits and loans, excluding about $4 billion in deposits related to the digital banking business and the Signet blockchain-based real-time payments platform.
    • Signature Bank had total assets of approximately $110.36 billion and total deposits of around $88.59 billion. Flagstar Bank acquired all deposits, some loans, and took over all 40 branches, leaving the FIDC in control of $40 billion of Signature Bank's loans and $4 billion in deposits not included in the deal.

See:  US Government Closes Signature Bank and Moves to Stop Potential Banking Crisis

  • An FIDC spokesperson stated that customers who do not move their deposits by the deadline will receive checks mailed to their registered addresses. This move has left several major crypto companies, including crypto exchange Coinbase and stablecoin issuer Circle, searching for alternative banking options. Coinbase had a deposit of $240 million with Signature Bank, while Circle held $250 million.
  • Signature Bank was one of the few crypto-friendly lenders in the industry, and its collapse earlier this month has raised questions about which banks the affected crypto companies will turn to next. Traditional banks have been hesitant to work with cryptocurrencies, and the current business environment makes it unclear where these companies will find a new home for their funds.

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