FDIC gives Signature’s crypto clients account deadline

Customers who had deposits in Signature Bank face a deadline regarding crypto assets.

Federal Deposit Insurance Corp. (FDIC) has told crypto customers with deposits at the failed bank that they face a deadline to close their accounts and move their money, according to Bloomberg.

New York Community Bancorp took over most of Signature Bank’s deposits and some of its loans earlier this month through its subsidiary Flagstar Bank.

But that deal did not include about $4 billion in deposits related to Signature’s digital asset banking business, according to the FDIC.

NEW YORK COMMUNITY BANK AGREES TO BUY FAILED SIGNATURE BANK

The Signature Bank logo displayed on a phone screen and representation of cryptocurrency is seen in this illustration image. (Jakub Porzycki/NurPhoto via Getty Images/Getty Images)

“We are reaching out to Signature depositors whose deposits were not included in NYCB’s bid,” an FDIC spokesperson told Bloomberg.

Depositors have been told that any accounts not closed by April 5 will be automatically closed and depositors will receive a check in the mail.

The signature failed following the demise of Silvergate Capital, which also arranged crypto industry, and Silicon Valley Bank.

After 40 years, Silicon Valley Bank, the nation’s 17th largest, was shut down by the FDIC as regulators moved to protect customers as it faced a liquidity crisis after losing $2 billion.

It was the biggest bank failure since the financial crisis.

In this photo illustration, the Flagstar Bank logo is seen in the background of a silhouetted woman holding a cell phone. (Rafael Henrique/SOPA Images/LightRocket via Getty Images/Getty Images)

SIGNATURE BANK CLOSED IN CONNECTION WITH SILICON VALLEY BANK SUMMARY

Signet, Signature’s real-time payments network widely used by crypto participants, had remained under FDIC receivership following the NYCB settlement, raising questions about the fate of the business.

US prosecutors were investigating Signature Bank’s work with crypto clients before the lender’s sudden collapse, Bloomberg has reported.

SIGNATURBANK IS UNDER CRIMINAL INVESTIGATION BEFORE THE COMPANY’S COLLAPSE

The Federal Deposit Insurance Corporation (FDIC) building is seen in Virginia, USA on March 17, 2023. (Celal Gunes/Anadolu Agency via Getty Images/Getty Images)

Justice Department investigators in Washington and Manhattan were looking into whether the New York bank took adequate steps to detect potential money laundering, such as monitoring transactions for signs of criminality.

CLICK HERE TO GET THE FOX BUSINESS APP

The Securities and Exchange Commission was also looking into it, according to people familiar with the situation.