Signature Bank shut by regulators, noting systemic risk
New York-based Signature Bank, a key bank to the cryptocurrency industry, was shut down by regulators on Sunday, according to a joint statement from U.S. regulators. The statement also detailed actions aimed at stemming broader fallout from the failure of Silicon Valley Bank.
State of play: All depositors at Signature, the third bank to shutter in a matter of days, will be made whole under the same systemic risk exception that allowed that outcome for Silicon Valley Bank customers.
- In a separate statement, the New York Department of Financial Services, one of Signature's regulators, said it remained in contact with the other entities it oversees, "in light of market events."
Between the lines: The collapse of Signature Bank, once known as one of the most crypto-friendly institutions on Wall Street, comes after the failure of crypto bank Silvergate last week.
- Late last year, Signature said it would pare back its exposure to the crypto industry and offload billions of dollars worth of deposits tied to the crypto sector.
Worth noting: As of December 2022, Signature Bank had total assets of roughly $110 billion and total deposits of about $83 billion.
- It had 40 branches in five states: New York, California, Connecticut, North Carolina, and Nevada.
- All deposits and nearly all of its assets were transferred to an entity called "Signature Bridge Bank," operated by the Federal Deposit Insurance Corp. (FDIC) to "maximize the value of the institution for a future sale and to maintain banking services in the communities formerly served by Signature Bank," the regulator said in a statement.
- Banking activities will resume on Monday.