Signature Bank Instructs Crypto Clients To Shut Down Accounts Within The Next 7 Days
Signature Bank, a New York-based private financial institution, has told its cryptocurrency clients to close their accounts by the 5th of April, per multiple reports. The reports claim that Signature Bank received a directive from the Federal Deposit Insurance Corporation (FDIC) to close the accounts of its crypto clients.
The reports are no surprise to many, as the banking sector has been in a financial crisis for weeks.
FDIC Communicates With Signature Bank Depositors Over Digital Assets Retrieval
A spokesperson for the US FDIC has revealed that the agency was communicating with Signature bank depositors whose deposits were excluded in the bid by New York Community Bank (NYCB).
Signature stated that each customer must ensure that their addresses are up-to-date. When they close their accounts, the bank will send the clients’ checks to their on-file addresses.
Last week, NYCB acquired most of the deposits and loans belonging to Signature Bank. However, the FDIC didn’t include roughly $4 billion of deposits that were part of Signature Bank’s digital banking operations.
Also, Signature-owned Signet Signature’s payments platform, which employs blockchain technology to allow instant payments with no transaction fees or limits, was excluded from the acquisition.
As of now, the future of this platform remains uncertain.
Why Did The FDIC Take Over Signature Bank?
Earlier this month, New York regulators shut down the New York-based Signature bank due to worries that it was in the midst of a bank run and posed a danger to the entire U.S. economy.
Adrienne A. Harris, the Superintendent, explained that the New York regulator had assumed control of Signature Bank per Section 606 of New York Banking Law, and the Federal Deposit Insurance Corporation (FDIC) will be the designated agency to perform the insurance process.
The Federal Reserve also noted in its announcement that the closure of the bank was to protect the United States economy and increase public trust in the banking system.
The FDIC’s role was to manage the money and assets associated with the bank.
Editorial credit: PL Gould / Shutterstock.com
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