NYCB’s subsidiary Flagstar Bank has become the buyer of Signature Bank’s crypto-friendly assets valued at $38.4 billion. They include a loan portfolio of $12.9 billion with a discount of $2.7 billion.
Today, we entered into an agreement with a subsidiary of New York Community Bancorp, Inc., to purchase and assume deposits and assets out of Signature Bridge Bank. Read more ➡️ https://t.co/bSshY93lBh. pic.twitter.com/b9RBvYtGF7
— FDIC (@FDICgov) March 19, 2023
On March 13, U.S. authorities began the bank’s resolution process for the troubled institution.
As of the latest reporting date, Signature Bank’s assets totaled $110.4 billion (including deposits of $88.6 billion). The FDIC will have about $60 billion at its disposal.
Forty branches of the bank will reopen under the new name on March 20. Deposits at Flagstar Bank up to $250,000 will be insured.
The acquisition deal for Flagstar Bank does not include crypto-related deposits totaling $4 billion (about 4.5%). The FDIC confirmed that it would transfer these deposits directly to the customers who opened the digital banking accounts.
According to Reuters, the Corporation urged banks interested in acquiring Silicon Valley Bank (SVB) and Signature Bank to refrain from any interaction with cryptocurrencies. A FDIC spokesperson, citing previous remarks by its chairman Martin Gruenberg, noted the inaccuracy of such assumptions. Earlier, similarly, NYDFS officials commented.
According to Nick Carter, cofounder of Castle Island Ventures, the news of Signature Bank’s purchase corroborates information from the agency’s sources.
Wow. Wow. the FDIC lied and Reuters was correct. I’m shocked. Shocked I tell you. This is the same FDIC chair who presided over Choke Point 1.0 by the way. pic.twitter.com/CHu8MgSW4X
— nic carter ? (@nic__carter) March 20, 2023
‘FDIC lied, and Reuters was right. I’m shocked. … This is the same FDIC chair who, by the way, presided over Choke Point», — said the expert.
Against the backdrop of events, former U.S. Representative Barney Frank stated that regulators had signaled to banks that cryptocurrencies are toxic.
Subsequently, Colorado Senator Michael Bennet, at hearings before the Senate Finance Committee named the crypto-friendly stance as a reason for Signature Bank’s collapse.
Earlier, IMFwarned about the negative impact of cryptocurrencies on banks.
Earlier, representatives of the USDC stablecoin issuers—Circle and Coinbase—said that problems in the banking sector led to uncertainty in the digital-asset market.