Crypto-Friendly Signature Bank Shut Down by State Regulators

New York-based Signature Bank, which has a number of crypto clients, was shut down Sunday by state regulators, the Federal Reserve announced.

In a statement, New York Department of Financial Services Superintendent Adrianne Harris said the Federal Depository Insurance Corporation (FDIC) had taken receivership of the bank. This marks the third bank collapse in under a week, following Silvergate Bank’s voluntary liquidation and Silicon Valley Bank’s shutdown on Wednesday and Friday, respectively.

Harris said the action was taken “to protect depositors.”

A joint statement from the Federal Reserve, FDIC and U.S. Treasury Department said all depositors who used Signature would be made whole, in a joint statement outlining actions the federal regulators would take to protect depositors in SVB.

“Signature Bank is a New York state-chartered commercial bank and is FDIC-insured, with total assets of approximately $110.36 billion and total deposits of approximately $88.59 billion as of December 31, 2022,” Harris’ statement said. “DFS is close contact with all regulated entities in light of market events, monitoring market trends, and collaborating closely with other state and federal regulators to protect consumers, ensure the health of the entities we regulate, and preserve the stability of the global financial system.”

“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. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer,” the joint Fed/FDIC/Treasury statement said.

The move came mere months after Signature announced it would be reducing its exposure to the crypto sector.

UPDATE (March 12, 2023, 23:35 UTC): Adds additional information.