Just a week after the collapse, Signature Bank’s deposits and loans are set to be sold to Flagstar Bank, a subsidiary of New York Community Bancorp — crypto-related deposits, however, will not be part of the deal.
The United States Federal Deposit Insurance Corporation (FDIC) announced the agreement on March 19, which will see $38.4 billion in non-cryptocurrency-related deposits and $12.9 billion in loans taken by the Michigan-based bank under “purchase and assumption agreements. . “
Beginning March 20, Signature’s Bank 40 branch will begin operating as Flagstar Bank, where all deposits deemed Flagstar Bank will continue to be insured up to an insurance limit of $250,000.
Today, we entered into an agreement with our subsidiary New York Community Bancorp, Inc., to purchase and assume the deposits and assets of Signature Bridge Bank. Read more ➡️ https://t.co/bSshY93lBh. pic.twitter.com/b9RBvYtGF7
– FDIC (@FDICgov) March 19, 2023
The takeover deal from Flagstar Bank excludes about $4 billion in deposits held by Signature Bank’s digital assets business. However, the FDIC confirmed it will transfer those deposits directly to customers who open digital banking accounts, stating:
“The FDIC will provide these deposits directly to customers whose accounts are associated with digital banking businesses.”
The $4 billion figure is about 4.5% of the $88.6 billion in total deposits that Signature Bank had as of December 31.
Coinbase, Celsius and Paxos are three crypto companies that have recently confirmed they have some exposure to Signature Bank.
related: US lawmakers accuse the FDIC of using banking instability to attack crypto
Last week, a March 17 report from Reuters cited two sources who suggested that Signature’s buyer would be required to divest itself of crypto activities as part of a potential rescue plan.
At the time, an FDIC spokesperson denied this, stating that the agency does not require crypto divestment as part of any sale.
However, Castle Island Ventures partner Nic Carter believes the latest announcement shows that the FDIC is “lying” in response to Reuters.
wow wow The FDIC lied and Reuters was right. I was shocked. Surprised I tell you. This is the same FDIC chair that led Choke Point 1.0 by the way. pic.twitter.com/CHu8MgSW4X
— nic carter (@nic__carter) March 20, 2023
The takeover comes after Signature Bridge Bank was ordered by the FDIC on March 12 after the New York Department of Financial Services (NYDFS) closed the bank and appointed the FDIC as receiver.