certify
Home arrow Article arrow Article Detail

FDIC Instructs Signature Buyers to Discontinue All Crypto Business

Profile Image

Pavan A Follow

INDIA

Mar, 17 2023

Mar, 17 2023

likes | comments 0

Article Image

The Federal Deposit Insurance Corporation (FDIC) has reportedly demanded that potential rescuers of failed U.S. banks stop all cryptocurrency services, according to a report from Reuters. Specifically, the FDIC has required buyers of Signature Bank to give up all cryptocurrency business at the bank.

 

The FDIC has committed to making all depositors whole at failed banks, regardless of whether or not they are insured. This may require swift action from the federal agency. As potential buyers circle the failed lender, the FDIC is requiring them to adhere to the terms of the agreement.

 

Furthermore, according to people familiar with the case, the FDIC will only consider offers from banks that already have a bank charter, favoring traditional lenders over private equity groups.

 

Signature Bank is a significant crypto-friendly bank in the United States, well known for its collaborations with the Coinbase exchange, Paxos Trust, BitGo, and bankrupt crypto lender Celsius. Even though Signature is a major player in the cryptocurrency industry, its deposit base is mostly comprised of middle-market enterprises such as real estate and legal firms.

 

When the crypto-friendly Silvergate Bank failed last week, numerous crypto businesses went to Signature. This caused several of Signature's more conventional clients to seek safer alternatives.

 

On March 12, the New York State Department of Financial Services formally closed and took over Signature, naming the FDIC as a receiver. To safeguard depositors, the FDIC transferred all of Signature Bank's savings and assets to Signature Bridge Bank.

 

FDIC may not have enough funds in its insurance fund to repay all depositors if they withdraw money immediately from failed banks. Nevertheless, the government has pledged a backstop, which makes it highly unlikely that all depositors will withdraw all at once. Furthermore, the failed banks possess billions of dollars in Treasuries and loans that can be liquidated and utilized to compensate most depositors.


likes | comments 0

Profile Image

Pavan A

CBW - External Analyst

INDIA

Comments
Data Centre Construction - World First artificial intelligence AI-Tech Utility Token
banner
Article
Animoca Ventures leads $1M seed funding round for Narwhal Finance

With participation from Hailstone Ventures and various angel investors, Narwhal Finance which is a decentralized cross-market perpetual trading platform built on BNB Chain and Arbitrum has announced;

Disclaimer: The information is for informational purposes only.​ This advertisement does not constitute financial advice or any other advice. You should consult with a financial professional to determine what may be best for your individual needs. None of the information and/or content available through this advertisement is intended as an offer or solicitation of an offer to buy or sell, or as a recommendation, endorsement, or sponsorship of any company, financial product, security or commodity. To the maximum extent permitted by law, we disclaim any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations prove to be inaccurate, incomplete or unreliable or result in any investment or other losses. In Making the investment decision, investors must rely on their own examination of the issuer and the terms of the offerings, including the merits and risks involved. Investments are speculative, illiquid, and involve a high degree of risk , including the possible loss of investment.