The 40 branches of Signature Bank will officially reopen and operate as Flagstar Bank on March 20.
Just a week after it collapsed, Signature Bank‘s deposits and loans business will be sold to Flagstar Bank, a subsidiary of New York Community Bancorp — but crypto-related deposits will not be part of the deal.
The United States Deposit Insurance Corporation announced the agreement on March 19, which will see $ 38.4 in non-cryptocurrency deposits and $ 12.9 in loans by banks of the United States taking Michigan under the “agreement buying and receiving”.
Beginning March 20, Signature’s Bank’s 40 branches will begin operating as Flagstar Bank, where all Flagstar Bank deposits will continue to be insured up to a $250,000 insurance limit. The Flagstar Bank takeover deal does not include the roughly $4 billion in digital business deposits owned by Signature Bank. Instead, the FDIC confirmed it will transfer those deposits directly to customers who open digital bank accounts, saying:
“The FDIC will provide these deposits directly to customers whose accounts are linked to digital banking services.”
The $4 billion fee is 4.5% of Signature Bank’s $88.6 billion total deposits as of December 31.
Coinbase, Celsius, and Paxos are three crypto companies that have recently confirmed that they have some exposure to Signature Bank. Last week, a March 17 report from Reuters cited two sources suggesting that any buyer of the signature would be required to withdraw crypto transactions as part of a potential ransom.
At the time, an FDIC spokesperson denied this, noting that the agency does not want to sell cryptocurrencies as part of a sale. Castle Island Ventures partner Nic Carter believes the new announcement shows the FDIC “lied” in a response to Reuters.
The takeover comes after the FDIC placed Signature Bridge Bank on March 12, following the bank’s closure by the New York Department of Financial Services and the appointment of the FDIC as receiver.
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