Regulators Shut Signature Banks Following SVB’s Collapse

The Us authorities, to avoid the spread of the banking meltdown, it has closed down another cryptocurrency-friendly bank based in New York City, the Signature Bank, this news being a serve blow to the cryptocurrency industry.

The United States announced the closure of the Signature Bank on Sunday, 12th March, the third largest failure of the US banking history after the closure of silicon bank two days before, leaving billions of dollars deposited by the crypto investors unclaimed.

This bank’s potential investors or victims include several crypto firms. Silver gate and Signature were both facilitators of digital assets liquidity that facilitated swift payments between clients, exchanges, and hedge funds. The closure of Signature Bank on Sunday has brought the crypto firm to a standstill looking for an option to facilitate the movements of their assets.

FDIC Insured Deposits up to $250,000

After the news of the closure of the Silicon Valley banks circulated last week, Signature’s business clients who have invested their money began to inquire about the security of their deposits; this is after the victims of Silicon Valley banks yet to get compensation for their cash.

Most of the depositors in silicon bank had more than $250,000 in their accounts, making them worried and sleepless nights demanding to know the safety of their money. According to the New York financial services department, The US Federal Deposit insurance corporation, which seized the SVB due to its collapse, can only cover deposits up to $250,000 maximum, the only amount they can refund.

The Signature was a big bank, and many crypto firms trusted it; it had $110 billion in assets and $90 billion in deposits at the end of 2022. The Federal Deposit Insurance Corporation took over their case, according to the New York department of financial services. The Signature had a market value of $4.4 billion on Friday; the company shares fell more than 20% in two days and 76% over the past year, as the most recent data shows.

Signature Bank Depositors to Be Refunded their Money

According to information which was issued jointly by the US Treasury Department and other banks authorities, it is stated that all the victims of Silicon Valley Bank and Signature Bank will be refunded in full, and no losses will receive from the depositor; hence they should stop being anxious about their money.

The Signature’s payment network, called signet, enabled crypto clients to make actual dollar payments anytime. Major crypto firms like Coinbase joined signet on October 2022 to enable instant money transfers to their clients worldwide.

Now that the Signature Bank is closed hence the signet service will be gone; it will have a profound impact on their user’s capacity to move funds faster into and out of the exchange, hence having a significant challenge to the crypto market’s liquidity.

All trademarks, logos, and images displayed on this site belong to their respective owners and have been utilized under the Fair Use Act. The materials on this site should not be interpreted as financial advice. When we incorporate content from other sites, we ensure each author receives proper attribution by providing a link to the original content. This site might maintain financial affiliations with a selection of the brands and firms mentioned herein. As a result, we may receive compensation if our readers opt to click on these links within our content and subsequently register for the products or services on offer. However, we neither represent nor endorse these services, brands, or companies. Therefore, any disputes that may arise with the mentioned brands or companies need to be directly addressed with the respective parties involved. We urge our readers to exercise their own judgement when clicking on links within our content and ultimately signing up for any products or services. The responsibility lies solely with them. Please read our full disclaimer and terms of use policy here.

Leave a Reply

Your email address will not be published. Required fields are marked *