Just a week after the collapse, deposits and loans at Signature Bank will be sold to Flagstar Bank, a subsidiary of New York’s community bank — but cryptocurrency-related deposits will not be part of the deal.
The FDIC announced the deal on March 19, and the Michigan-based bank will take over $38.4 billion worth of non-cryptocurrency-related deposits and $12.9 billion in loans under a “buy and assume agreement.”
Beginning March 20, 40 Signature Bank branches will begin operating as Flagstar Bank, and all deposits undertaken by Flagstar Bank will continue to be insured up to the $250,000 insurance limit. The Flagstar Bank acquisition excludes about $4 billion in deposits held by Signature Bank’s digital asset business. Instead, the FDIC confirmed that those deposits would be transferred directly to customers who opened digital bank accounts, saying: The FDIC will make these deposits directly to customers whose accounts are linked to digital banking. "
The $4 billion figure accounted for 4.5 percent of Signature Bank's total deposits of $88.6 billion as of Dec. 31.
Coinbase, Celsius, and Paxos are the three crypto firms recently confirmed to have some contact with Signature Bank. Last week, a March 17 Reuters report cited two sources as saying that any buyer of Signature would have to divest its crypto activities as part of a potential rescue package.
At the time, an FDIC spokesperson denied the claim, noting that the agency had not required divestment of crypto assets as part of any sale. Nic Carter, a partner at Castle Island Ventures, believes the latest announcement shows that the FDIC is "lying" in its response to Reuters. The acquisition follows the FDIC's creation of Signature Bridge Bank on March 12 after the New York Department of Financial Services closed the bank and designated the FDIC as its receiver.
