Signature Bank has been Officially Shut Down by Regulators
- Superintendent Adrienne A. Harris confirmed that the New York Department of Financial Services (DFS) has taken possession of Signature Bank.
- The Federal Deposit Insurance Corporation (FDIC) has been established as the receiver for the banking firm.
- The bank had total assets of approximately $110.36 billion and total deposits of approximately $88.59 billion as of December 31, 2022.
- The Fed, FDIC, and Treasury Department issued a joint statement confirming that all depositors will be made whole.
The troubles of the crypto market are far from over as authorities continue their attempts to provide safety to investors and customers of crypto firms. Interestingly, a New York-based bank, Signature Bank, has been closed down and is now being taken over by the New York Department of Financial Services (NYDFS). The bank established its presence in the crypto industry after providing services to several crypto firms.
According to an announcement from Superintendent Adrienne A. Harris on March 12, “the New York Department of Financial Services (DFS) has taken possession of Signature Bank, pursuant to Section 606 of the New York Banking Law, in order to protect depositors.” Moreover, the Federal Deposit Insurance Corporation (FDIC) has been established as the receiver for the banking firm as well.
It is crucial to note that Signature Bank is insured by the FDIC and had total assets of approximately $110.36 billion and total deposits of approximately $88.59 billion as of December 31, 2022.
“DFS is in close contact with all regulated entities in light of market events, monitoring market trends, and collaborating closely with other state and federal regulators to protect consumers, ensure the health of the entities we regulate, and preserve the stability of the global financial system,” said the statement.
On the other hand, in a joint statement released by Secretary of the Treasury Janet L. Yellen, Federal Reserve Board Chair Jerome H. Powell, and FDIC Chairman Martin J. Gruenberg, it was revealed that all the depositors of Signature Bank will be made whole without any complications. It was also confirmed that the decision to close the bank was made to strengthen the US economy and public confidence in the US banking system.
Furthermore, the Federal Reserve also added that additional funding will be provided to eligible depository institutions to help assure that “banks have the ability to meet the needs of all their depositors.”
“Shareholders and certain unsecured debtholders will not be protected. Senior management has also been removed. Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law,” read the joint statement.
As reported earlier by Bitnation, one of the largest banking institutions in the world, Silicon Valley Bank, was closed by the California Department of Financial Protection and Innovation (DFPI), and the FDIC was established as the receiver in this case as well. As per the joint statement, the depositors will have access to all their funds once the bank opens its doors on Monday.
It is crucial to note that crypto payments company Paxos confirmed in a Twitter post that “it currently holds $250 million at Signature Bank and holds private deposit insurance well in excess of our cash balance and FDIC per-account limits.”
In a follow-up Twitter post, the company confirmed that it “holds all customer assets and stablecoin reserves bankruptcy remote. All Paxos stablecoin reserves are fully-backed and redeemable to customers 1:1 with the U.S. dollar at all times.”
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
