New York Community Bank Will Acquire Signature — But Not Crypto Holdings
An estimated $4 billion in cryptoassets will remain under the receivership of the FDIC
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A subsidiary of the New York Community Bankcorp, Inc. has entered an agreement to purchase Signature Bank, the Federal Deposit Insurance Corporation (FDIC) said in a press release on Sunday.
The latest deal includes all $38.4 billion in Signature’s assets and $12.9 billion in loans, which were purchased at a significant discount of $2.7 billion.
What’s not included in the acquisition is approximately $60 billion in loans — which will remain under the receivership of the FDIC until later distribution — and $4 billion in deposits from Signature’s cryptocurrency business.
All Signature customers with cryptocurrency-related deposits with Signature bank will receive their funds directly from the FDIC.
The 40 branches of Signature Bank will operate during normal business hours under the subsidiary Flagstar Bank, starting today.
Signature Bank was the third bank to close its doors this month, following the collapse of Silicon Valley Bank and Silvergate Bank.
Unlike the other two banks, however, Signature bank was shut down by New York state regulators, ostensibly, to protect the US banking system, although not due to insolvency.
Its closure has drawn concern across the broader cryptocurrency industry, as it was one of the few traditional financial institutions that recognized cryptoassets.
A CoinGecko report shows that the crypto company which has had the most exposure to the bank failures is Circle — the issuer of the USDC stablecoin.
Circle announced last week that it was accelerating the onboarding of a new banking partner, Cross River Bank.
Paxos, Coinbase, BlockFi also have material exposure to the shuttered bank. Paxos reported $250 million held at Signature, while Coinbase had $240 million with Signature Bank, and BlockFi noted $227 million in assets were affected.
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