US FDIC to return ¥530 billion worth of cryptocurrency corporate deposits at Signature Bank

US FDIC to return ¥530 billion worth of cryptocurrency corporate deposits at Signature Bank

Acquisition of Signature Bank

Federal Deposit Insurance Corporation (FDIC) Chairman Martin Gruenberg said at a hearing in the U.S. House of Representatives on the 29th that about 530 billion yen ($4 billion) in deposits of crypto assets (virtual currency) companies of the failed Signature Bank He testified that the funds would be returned to depositors by early April.

Hearings held by the House Financial Services Committee have summoned officials from the Treasury Department, the Federal Reserve, and the FDIC to testify about federal regulators’ handling of bank failures.

The FDIC announced today that New York Community Bancorp (NYCB) has agreed to acquire some of Signature Bank’s deposits and assets. At the hearing, Gruenberg said that $4 billion in deposits related to cryptocurrency businesses that were not included in the deal were expected to be “returned by next week.”

Prior to the hearing, crypto industry customers holding funds in signature banks will be contacted by the FDIC and have until April 5 to transfer their assets or accept account closure measures. Bloomberg reported that he was presented with a choice. Depositors whose accounts have been closed will receive checks.

Gruenberg stressed that the decision not to include cryptocurrency-related assets in the acquisition was simply the choice of NYCB, which won the bid.

The company also said that Signet, a payment network dedicated to Signature Bank’s cryptocurrency clients, is not included in the acquisition, is under FDIC control, and is in the process of being sold. bottom.

Republican Rep. Tom Emmer, a well-known cryptocurrency advocate, said Signet is an innovative technology by a private company that “seems to be comparable to FedNow,” a real-time payment service that the US Federal Reserve (Fed) is preparing to introduce. He said he would like to confirm the completion of the sale as it is an asset of great value.

Criticism of Signature Bank Closure

Signature Bank was closed Thursday by the New York State Department of Financial Services (NYDFS) “to avoid a financial system crisis” after the failure of Silicon Valley Bank (SVB).

Over the move, former Republican congressman Barney Frank, who sits on the board of Signature Bank, and Ryan Selkis, founder of blockchain analytics firm Messari, have criticized the once solvent and well-run bank as a virtual currency. It accuses regulators of “targeting” them to show their opposition.

connection:Signature Bank Director Says U.S. Regulators Are Against Cryptocurrencies

Emmer referred to Frank’s remarks in a letter to the FDIC governor on Wednesday criticizing the FDIC’s actions against signature banks.

connection:US Congressman questions FDIC over signature bank shutdown

The Sale of Silicon Valley Bank and its Impact on Cryptocurrency Collapse

Meanwhile, in the sale of SVB, Gruenberg testified that the winning bidder, First Citizens Bank, acquired all assets, including cryptocurrency-related deposits. Gruenberg denied that Emmer had told banks that the FDIC might increase scrutiny of retaining or taking on new cryptocurrency customers.

At the hearing, Treasury Undersecretary for Domestic Finance Nellie Liang testified that he did not believe cryptocurrencies played a direct role in the collapse of Signature Bank and SVB.

I know that Signature has been involved in activities involving digital assets, but I don’t think that was the main (cause)

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Written by: Kurt Ebenzer


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