Yet another crypto-friendly bank has fallen.
Signature Bank was shut down on March 12th by New York state regulators. According to an announcement by the Federal Reserve, Signature Bank, a cryptocurrency-friendly bank based in New York, was closed due to system risk concerns.
In a statement, Superintendent Adrienne A. Harris stated that the New York regulator seized control of the troubled bank and appointed the United States Federal Deposit Insurance Corporation (FDIC) to handle the insurance process.
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A joint statement by Treasury, Federal Reserve, and FDIC highlighted that the decision was reached to protect the country’s economy and strengthen confidence in the banking sector.
Today we are taking decisive actions to protect the US economy by strengthening public confidence in our banking system.
The statement also explained that the step by the regulators will ensure that the US banking sector continues to offer its services in a sustainable manner.
According to the banking regulators, all depositors at the closed bank will get their money back in full, in a move similar to that for the Silicon Valley Bank resolution case.
All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.
On March 10th, regulators shut down the Silicon Valley Bank and seized its deposits in what qualifies as one of the largest banking failures in US history. The closedown of Silicon Valley came a few days after the bank reported that it was struggling. The announcement caused depositor outflow.
Signature is one of the largest crypto-focused banks alongside Silvergate, which also announced the plan to wind down.