FDIC ready to sell crypto-friendly bank in $38.4 billion deal, but excludes Digital Asset Banking branch from transaction
The US Federal Deposit Insurance Corporation (FDIC) has found a buyer for failed crypto-friendly financial institution Signature Bank.
According to a new press release from the regulator, the FDIC has entered into a “purchase and assumption agreement” with Flagstar Bank, a subsidiary of New York Community Bancorp.
The document states that the deal is worth $38.4 billion, which includes “substantially all deposits and certain loan portfolios” of the failed bank.
However, the terms do not include Signature’s approximately $4 billion in deposits related to its digital asset banking business. The FDIC says it will give the deposits directly to those customers.
Reuters reported last week that the FDIC required all banks interested in acquiring Signature to agree to divest all of the company’s crypto-related businesses.
Included in the $38.4 billion deal is $12.9 billion of Signature’s debt, which Flagstar bought at a $2.7 billion discount. The FDIC’s receivership will hold $60 billion of Signature’s loans, and the regulator also received shares in New York Community Bancorp worth up to $300 million.
The New York State Department of Financial Services shut down the crypto-friendly bank earlier this month after customers withdrew $10 billion worth of deposits in a single day. The state regulator appointed the FDIC to operate a “bridge bank” that held all of Signature’s assets until the financial institution could be sold.
Signature Bank board member Barney Frank, a former Democratic congressman from Massachusetts, told CNBC last week that he believed the bank’s shutdown was part of a regulatory crackdown on crypto.
“I think part of what happened was that regulators wanted to send a very strong anti-crypto message. We became the poster boy because there was no insolvency based on the fundamentals.”
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