Federal Deposit Insurance Corporation appointed as receiver of the bank, a big lender in the crypto industry
On Sunday, US regulators shut down New York-based Signature Bank in an effort to prevent a banking crisis from spreading in the aftermath of Silicon Valley Bank’s failure last week (SVB).
New York State Department of Financial Services (DFS) Superintendent Adrienne A. Harris said in a statement that the department had taken possession of Signature Bank “to protect depositors.”
“The Federal Deposit Insurance Corporation (FDIC) was appointed as receiver of the bank by the DFS,” Harris said.
She stated that the bank is FDIC-insured, with nearly $110.36 billion in assets and $88.59 billion in deposits as of the end of 2022.
“In light of market events, DFS is in close contact with all regulated entities, 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 global financial system’s stability,” she said.
Signature Bank has been a major lender to the cryptocurrency industry, trailing only Silvergate Capital, which announced last Wednesday that it will cease operations and liquidate its bank.
SVB was the first FDIC-insured institution to fail in 2023
SVB shares fell more than 60% on Thursday after the company announced plans to raise more than $2 billion in the capital after selling a $21 billion bond portfolio at a nearly $1.8 billion loss.
Its operations were halted as the bank continued to lose money in the futures market after some venture capital investors advised startups to withdraw their money from the bank in order to avoid losses on deposits exceeding the FDIC’s $250,000 coverage limit.
The California Department of Financial Protection and Innovation (DFPI) took control of the bank and appointed the FDIC as the receiver of SVB, causing market volatility. In 2023, the SVB was the first FDIC-insured institution to fail.
SVB was the largest bank failure since the financial crisis of 2008.
