Signature Bank’s Non-Crypto Deposits Sold to Flagstar Bank
- 40 branches of Signature Bank will be reopened and operated as Flagstar Bank after it acquires $38.5 billion in non-crypto deposits and $12.9 billion in loans.
- The FDIC confirmed that the $4 billion in Signature Bank crypto deposits will be directly returned to customers who had opened a digital asset banking account.
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Crypto-friendly Signature Bank is selling its deposits and loans, with the exception of crypto-related deposits, to a subsidiary of the New York Community Bancorp, the FDIC said in a press release on 19 March.
According to the announcement from the U.S. Federal Deposit Insurance Corporation (FDIC), Flagstar Bank will take over $38.4 billion in non-cryptocurrency related deposits, and $12.9 billion in loans from Signature Bank under a “purchase and assumption agreement”. Starting Monday, depositors of Signature wil automatically become depositors of Flagstar, and will continue to be insured up to the $250,000 FDIC insurance limit.
Flagstar Bank’s takeover deal did not include around $4 billion in deposits related to the former Signature Bank’s digital asset banking business. The FDIC, however, confirmed that these deposits will be directly transferred to customers who had opened a digital banking account with the former bank. Some of the big crypto firms to have confirmed having some exposure to Signature Bank include Coinbase, Paxos, and Celsius.
Signature Bank’s troubles began last week, when it became the third crypto-friendly bank to close its doors following Silvergate’s voluntary liquidation of assets and the closure of Silicon Valley Bank (SVB). The bank was closed down by the New York Department of Financial Services on 12 March, and the FDIC was appointed as its receiver.
- The crypto exchange blamed the issue on a decision made by its third party payments provider in Australia, noting that it is now looking for a new partner in the country.
- Binance Australia assured users that AUD withdrawals are still available, and that they can continue to buy and sell crypto using debit/credit cards and its P2P marketplace.
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- The exchange first paused Bitcoin withdrawals late on 7 May due to a network congestion issue, but resumed them only an hour and a half later.
- The second pause took place early on 8 May, and lasted almost three hours, but the issue now appears to be fixed after the exchange adjusted its transaction fees.
- Coinbase has informed its customers that it will no longer provide support for Signature Bank’s Signet real-time payments network.
- The crypto exchange is now looking for an alternative payments network provider, while waiting for more clarity on the outcome of Signet.