Regulators Shutter Signature Bank Days After SVB Collapse $BTC

According to an announcement by the Federal Reserve, New York-based Signature Bank, which had several clients in the cryptocurrency space, was shut down by state regulators.

Signature Bank Shut Down

New York State financial regulators on Sunday shut down Signature Bank. The move comes as the fallout from the implosion of SVB Financial Group’s Silicon Valley Bank threatens to start a domino effect. According to regulatory authorities, depositors of the New York-based banks would be able to access their funds under a “very similar systemic risk exception” to that of Silicon Valley Bank, according to a joint statement by the Treasury Department, the Federal Reserve, and the Federal Insurance Deposit Corp. The statement stated,

“We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.”

The joint statement also outlined several actions that federal regulators would be undertaking to ensure the protection of depositors in SVB.

“Signature Bank is a New York state-chartered commercial bank and is FDIC-insured, with total assets of approximately $110.36 billion and total deposits of approximately $88.59 billion as of December 31, 2022. DFS is in close contact with all regulated entities in light of market events, monitoring market trends and collaborating closely with other state and federal regulators to protect consumers, ensure the health of the entities we regulate, and preserve the stability of the global financial system.”

An Unexpected Decision

The decision by regulatory authorities to put Signature Bank into receivership came as a surprise to many, most of all to its managers, who, according to sources, found out about the decision just before the public announcement. As a result of the announcement, the bank faced a barrage of deposit outflows on Friday. However, the situation seemed to stabilize over the weekend, according to a person familiar with the matter.