Crypto-friendly Signature Bank was shut down by the New York Department of Financial Services (NYDFS), marking the third bank collapse within a week after Silvergate Bank and Silicon Valley Bank (SVB).
The announcement was made by the Federal Reserve (Fed), the central banking system of the U.S.
- The move came right after Signature Bank experienced a steady outflow influx and a major stock selloff following the rising concerns caused by the collapse of SVB.
- Officials underlined that the step aims to protect depositors.
- In a joint statement, the Fed, the U.S. Treasury Department, and the Federal Deposit Insurance Corporation (FDIC) said no losses related to the bank would be incurred by the taxpayer, and all depositors would be paid whole.
- FDIC took the receivership of Signature Bank, and senior managers were discharged.
- Signature Bank had total assets of nearly $110.36B and total deposits of around $88.59B as of the end of 2022.
- The bank also had lots of crypto clients, and some of them, including Paxos, Coinbase, Circle, and Celsius, announced funds in Signature Bank.
- In December 2022, Signature Bank said it would reduce its exposure to the crypto sector by $8B to $10B.
- Earlier in March, crypto-focused Silvergate Bank announced voluntary liquidation almost a week after it warned that it might not survive another 12 months since it might be less than well-capitalized.
- SVB, one of the U.S.' 20 largest banks, was closed by the California Department of Financial Protection and Innovation on March 10.
