The New-York-based bank, which is also known to serve a number of crypto firms, was shut down by state regulators, according to a Federal Reserve announcement.
New York-based Signature Bank, another crypto-friendly bank, has been closed down by its state charter authority as of Mar. 12.
The Federal Reserve explained in a Mar. 12 statement that the decision was made in conjunction with U.S. Federal Deposit Insurance Corporation (FDIC) to protect the U.S. economy and strengthen public confidence in the banking system.
However, the Federal Reserve quickly noted that it is backstopping all depositors of Signature Bank.
“All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.”
“This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth,” the statement added.
Shareholders and certain unsecured debtholders will not be protected though, according to the statement.
Signature Bank has closed down, per press release from the federal reserve pic.twitter.com/sVl8B8G8bQ
— Pledditor (@Pledditor) March 12, 2023
The Federal Reserve Board added that it will provide additional funding to eligible depository institutions to ensure banks can meet the needs of all their depositors.
This is a developing story and more information will be added as it becomes available.
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Author: Brayden Lindrea
