New York-based Signature Bank has been shut down by regulators.
A joint statement issued by the U.S. Treasury, Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) disclosed the closure of Signature Bank.
“We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole,” they said.
Signature is one of the largest banks still servicing the crypto industry today. The bank had $110.4 billion in total assets and $88.6 billion in total deposits as of Dec. 31. It was also one of the only major fiat on-ramps for digital asset firms and exchanges after Silvergate Bank’s closure last week.
However, according to a securities filing, nearly 90% of Signature’s deposit base was not insured by the FDIC.
90% of Signature Bank’s deposits were uninsured pic.twitter.com/DzY0oUn3wB
— Eric Wallerstein (@ericwallerstein) March 12, 2023
The news comes after regulators took control of Silicon Valley Bank (SVB) on Friday, following a massive run on its deposits. Treasury Secretary Janet Yellen approved actions that enabled the FDIC to complete its resolution of SVB so that depositors would have access to the entirety of their funds by March 13.
The effects of SVB’s collapse played out fairly quickly in the crypto space, particularly after stablecoin issuer Circle revealed it held $3.3 billion worth of its USDC reserves at the bank.
2/ Like other customers and depositors who relied on SVB for banking services, Circle joins calls for continuity of this important bank in the U.S. economy and will follow guidance provided by state and Federal regulators.
— Circle (@circle) March 11, 2023
Following the revelation, USDC lost its peg to the U.S. dollar, dropping 10% to a low of $0.8774 on Saturday. The stablecoin has since recovered to $0.99. Circle also said it would “cover any shortfall” using corporate resources in the event that SVB does not return 100% of its deposits.
Paolo Ardoino, CTO of Tether, tweeted that the USDT-issuer had no exposure to Signature Bank.
#tether doesn't have any exposure to Signature Bank.
— Paolo Ardoino 🍐 (@paoloardoino) March 12, 2023