Signing Bank – a New York-based lender focused on serving companies in the crypto industry – has closed.New York State Department of Financial Services closed Send money to your bank on Sunday with the FDIC as the payee.
US President Joe Biden Said Treasury Secretary Janet Yellen and Economic Council Director Brian Deeds worked with regulators to address both the SVB and Signature Bank issues “at his direction.”
Biden tweeted on Sunday, “I’m glad they’ve arrived at a solution that protects workers, small businesses, taxpayers and our financial system.” We are committed to continuing our efforts to ensure full accountability and increased oversight and regulation of large banks to ensure that we are never in a position like this again.”
Signing is the second major bank to fail in two days, following the March 10th Silicon Valley Bank closure.
Like Silicon Valley Bank, the FDIC has moved all of Signature’s deposits and assets to Signature Bridge Bank, a new full-service bank created by the FDIC. Activities at 40 branches of banks nationwide will resume on March 13, including online banking.
The FDIC noted that all customers will continue to have uninterrupted access to funds.
“The transfer of all deposits shall be Systemic risk exception Approved earlier today. All depositors of the institution will be full. There are no losses borne by the taxpayer. Shareholders and certain unsecured debt holders are not protected. Senior management was also dismissed. Losses to the Deposit Insurance Fund (DIF) to assist uninsured depositors will be recovered through special assessments for banks as required by law,” the FDIC said in a statement.
This action is designed to protect depositors and preserve the value of bank assets while the FDIC searches for potential bidders.
Signature’s stock has lost almost 40% of its value since the beginning of the year after peaking in early 2022. In the past few months, the bank has signed several large customers who have left Silvergate, including LedgerX and Coinbase.
According to Coinbase, Signature has a corporate cash balance of about $240 million and is expected to fully recover.
