Signature, Silicon Valley Bank Depositors Will be Made Whole

Taxpayers will not be forced to bail out either bank, as Signature is added to the list of failures

article-image

Signature Silicon Valley bank depositors made whole

share

The US Treasury Secretary, Janet Yellen, along with Federal Reserve Board Chair, Jerome Powell and FDIC Chairman, Martin Gruenberg, said Sunday they are taking action to protect the US economy by strengthening public confidence in the banking system.

The failure of Silicon Valley Bank, located in Santa Clara, California, is to be resolved in a way that will fully protect all depositors, who will be granted access to their money starting from March 13, the regulators said in a statement.

“After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors.”

No taxpayer losses will be associated with the resolution, they said.

A similar “systemic risk exception” has also been announced for Signature Bank, based in New York, reportedly closed by its state chartering authority on Sunday. All institution depositors will be fully compensated, with also no losses being borne by taxpayers.

Though the regulators said, shareholders and some unsecured debtholders will not be protected, and senior management has been removed. Any losses related to uninsured depositors will be recovered by a special assessment on banks, as required by law.

The Federal Reserve Board has also announced that additional funding will be made available to eligible depository institutions to ensure they can meet the needs of all their depositors.

“The US banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry,” the regulators said.

On Friday, California regulators ordered the bank to halt its operations and tasked the FDIC with managing its unwinding. While SVB has traditionally been a financial favorite in the tech industry, several crypto companies have become its clients in recent years.

Several reforms were borne out the 2008 financial crisis designed to curb the impact of large systemic risk presented by institutions considered “too big to fail” a the time. That included the likes of the Dodd-Frank Wall Street reform, which helped establish fresh oversight of banks throughout the US.

Following the failure of SVB last week, some crypto companies — notably Circle — made public their exposure to the bank. In Circle’s case, some $3.4 billion was trapped at SVB, which led to a run on the USDC stablecoin over the weekend.

USDC dipped as low as $0.87 at one point, before Circle CEO Jeremy Allaire issued a statement on Saturday that calmed markets.

Tags

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Featured.png

Research

Helium stands at a pivotal moment in its evolution as a decentralized wireless network, balancing rapid growth, economic restructuring, and global expansion. With accelerated growth in domestic DAUs and Hotspots supporting its network, Helium is leveraging strategic partnerships and innovative proposals to scale internationally. The recent implementation of HIP 138, “Return to HNT,” has unified its token economy under HNT, simplifying participation and strengthening liquidity, while HIP 139’s phase-out of CBRS refocuses efforts on scalable Wi-Fi offload. Meanwhile, governance shifts under HIP 141 raise questions about centralization as Nova Labs consolidates control over the roadmap.

article-image

The Arbitrum-based perps DEX recently launched its points campaign

article-image

P2P Foundation founder Michel Bauwens revealed this week that Satoshi wrote him over email in the early days of Bitcoin

article-image

A Blockworks Research report looked at how Hyperliquid has maintained its hype and how it can build out its businesses

article-image

Dragonfly’s Rob Hadick discussed how the firm is approaching investments in the current market

article-image

The asset surged over the past seven days to reach its highest-ever weekly close on the SOL/ETH pair

article-image

Industry watchers note that SOL ETFs have attracted a fraction of the demand for bitcoin and ether ETFs