Martin Gruenberg, chairman of the United States Federal Deposit Insurance Corporation, said the FDIC plans to return approximately $4 billion in deposits tied to Signature Bank’s digital asset banking business in early April.
In a March 29 hearing of the US House Financial Services Committee exploring the response of federal regulators to the recent bank failure, Gruenberg said that the deposits that were not included in the bid from the subsidiary of New York Community Bancorp for Signature will be returned “early next week.” – approx. $4 billion tied up in digital assets. Reports have suggested that the FDIC will close all crypto-related accounts that are not part of the NYCB deal on April 5 if depositors do not move funds.
According to Gruenberg, the Signature Signet payment platform – which, along with digital asset deposits, is not included in the NYCB offer – is “in the process of being marketed” to potential buyers. The FDIC, along with New York’s financial regulator, closed crypto-friendly banks on March 12, citing risks to the US economy after Silicon Valley Bank and Silvergate Bank failed.
Nellie Liang, Undersecretary of Domestic Finance at the US Treasury Department, said she does not believe crypto “played a direct role” in the failure of Signature or Silicon Valley Bank:
“I understand that Signature has activities in digital assets, but I don’t believe that this is the main thing [cause].”
The March 29 hearing marked the second time Liang, Gruenberg, and Fed vice chairman for supervision Michael Barr addressed lawmakers after the collapse of three major banks in the United States. The Senate Banking Committee held a hearing on March 28, where Gruenberg said Silvergate Bank had not adequately managed the risks that led to the failure.
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Although some lawmakers and regulators have appeared to share the banks’ relationship with digital asset companies, many have criticized the association as unwarranted. Former member of the House of Representatives and Signature board member Barney Frank reported that officials wanted to send a “very strong anti-crypto message,” stating that the bank did not have problems with solvency at the time of its closure.
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