Mar 20, 2023
Signature’s Crypto Business Wasn’t Part of Takeover Deal
(Bloomberg) -- Signature Bank’s crypto-related deposits will be returned to customers directly, rather than being taken over by a unit of New York Community Bancorp under a deal announced Sunday.
The Federal Deposit Insurance Corp. said Flagstar Bank’s bid didn’t include Signature’s digital-assets business, and about $4 billion of deposits related to it will be given back to customers.
Under the takeover agreement, Flagstar Bank will acquire “substantially all deposits and certain loan portfolios” from Signature, after the New York State Department of Financial Services closed New York-based Signature earlier this month and appointed the FDIC as receiver. Signature’s 40 branches will operate as Flagstar locations as of Monday.
Signet, Signature’s real-time payments network that’s widely used by crypto participants, is being left behind under the receivership by the FDIC, a spokesperson for the FDIC confirmed. That means the Signet platform is currently under the FDIC’s control and will be subject to later arrangement by the agency.
The shuttering of Silvergate Capital Corp. and Signature Bank has made it difficult for crypto platforms and investors to transfer traditional currencies. US prosecutors were investigating Signature Bank’s work with crypto clients before the lender’s sudden collapse, Bloomberg reported earlier.
--With assistance from Max Reyes.
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