The Federal Reserve announced that New York-based Signature Bank, which has a number of crypto clients, was shut down Sunday by state regulators.
in the current situationNew York Department of Financial Services Superintendent Adrian Harris said the Federal Deposit Insurance Corporation (FDIC) had taken custody of the bank. It marks the bank’s third collapse in less than a week, following the voluntary liquidation of Silvergate Bank and the closing of the Silicon Valley bank on Wednesday and Friday, respectively.
Harris said the measure was taken “to protect depositors”.
“Signature Bank is a commercial bank chartered from the state of New York and is FDIC-insured, with total assets of approximately $110.36 billion and total deposits of approximately $88.59 billion as of December 31, 2022,” Harris’ statement said. “DFS is in close contact with all regulated entities in light of market events, monitors market trends, and cooperates closely with other state and federal regulators to protect consumers, ensure the health of the entities we regulate, and maintain the stability of the global financial system.”
“We are also announcing a similar systemic exception to risk for Signature Bank, New York, NY, which was closed today by a state charter authority. All depositors to this institution will be made full. As with Silicon Valley Bank’s decision, no funds will be issued,” the joint statement said. For the Fed / FDIC / Treasury the losses will be borne by the taxpayer.
The move came just months after Signature announced that it would reduce its exposure to the crypto sector.
Update (March 12, 2023, 23:35 UTC): Adds additional information.
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