The New-York-based bank, which is also known to serve a number of crypto firms, was shut down by state regulators, according to a Federal Reserve announcement.
New York-based Signature Bank, another crypto-backed bank, has effectively shut down and is being taken over by the New York Department of Financial Services (NYDFS).
Administrator Adrienne A. Harris announced this story in a March 12 statement. The New York regulator took over Signature Bank pursuant to section 606 of the New York banking law and appointed the United States Federal Deposit Insurance Corporation to manage the insurance system.
The Federal Reserve explained that Mar. 12 said the decision to close the bank was made with the US Federal Deposit Insurance Corporation (FDIC) to protect the US economy and promote public confidence in the banking system.
A senior US Treasury official reportedly told reporters that today’s actions by the NYDFS and the Federal Reserve are intended to prevent depositor outflows and prevent another bank run:
“The actions we took today are designed to limit the consequences of Silicon Valley’s departure from Signature and to minimize any impact.”
“Companies are not being bailed out. Depositors are protected,” the official said. “Efficiency, the ability to keep wages working is really important,” the Treasury official added. The Federal Reserve also said it supports all depositors at Signature Bank.
“All those who keep this office will be healed. As with the Silicon Valley Bank decision, there is no loss to be borne by the taxpayer.
“This step will ensure that the U.S. banking system continues to perform its important role of protecting deposits and providing access to credit to households and businesses in a way that supports strong economic growth.” strong and durable,” the statement added.
Shareholders and certain creditors will not be protected, however, according to the statement. Senior management was also removed.
Signature Bank had $88.6 billion in deposits as of December 31 and is considered by some to be one of the best crypto banks in the United States.
Silvergate Bank, another leading crypto-friendly bank, announced last week that it will close and go into voluntary receivership “due to recent corporate and regulatory issues.”
According to some analysts, Signature Bank can withstand the storm caused by the failure of FTX because its managers are more diverse than Silvergate Bank, where only 25% of its deposits come from crypto.
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