Signature Bank business sold in the U.S. minus the cryptocurrency part
The Federal Deposit Insurance Corporation (FDIC) has sold the business of the closed Signature Bank, minus assets related to cryptocurrency activities
About $4 billion in funds related to the bank's digital assets business will remain under the control of the Federal Deposit Insurance Corporation
The Federal Deposit Insurance Corporation (FDIC) has sold Signature Bank's business except for its cryptocurrency portion. As of March 20, Signature Bank's 40 units will be operated by Flagstar Bank, owned by New York Community Bancorp, according to a press release from the regulator.
Signature Bank had $88.6 billion in total deposits and $110.4 billion in total assets at the end of 2022, with nearly a quarter of Signature's deposits coming from the cryptocurrency sector as of the end of last September.
Under the purchase agreement, Flagstar Bank will take over non-cryptocurrency deposits and some of the loan portfolios owned by the closed bank Signature. Signature's depositors - with the exception of those associated with the digital asset business - automatically become Flagstar depositors. According to the announcement, their funds will continue to be insured by the FDIC up to the insurance limit.
Flagstar Bank's application to buy Signature's assets did not include about $4 billion in deposits related to Signature's digital business. According to the press release, the FDIC will directly provide access to those funds to their owners.
As part of the deal, Flagstar Bank acquired about $38.4 billion of Signature's assets, including $12.9 billion in loans purchased at a discount of $2.7 billion. The statement said that approximately $60 billion of Signature's loans will remain under FDIC control.
The media had previously reported that the buyer of Signature Bank would have to divest from cryptocurrency companies. However, the FDIC denied this information, stating that it would not require divestment from cryptocurrency activities as part of any deal to sell the bank's assets.
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