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On Monday, about a week after the collapse of Signature Bank, the Federal Deposit Insurance Corporation (FDIC) announced that Flagstar Bank, a wholly owned subsidiary of New York Community Bancorp, acquired 40 former branches of Signature and its assets. Flagstar assumed nearly all of Signature\u2019s deposits, except for $4 billion of deposits related to the bank\u2019s crypto banking business.<\/strong><\/p>\n The FDIC has announced<\/a> that Flagstar Bank, a subsidiary of New York Community Bancorp, has acquired the assets and bank branches of Signature Bank as of March 20, 2023. The branches will continue to operate during regular business hours. With the exception of depositors related to the digital banking business, depositors of Signature Bank will automatically become depositors of Flagstar Bank.<\/p>\n I really hope we will understand how Signature Bank was selectively stripped of its digital assets business before being acquired.<\/p>\n \u2014 David Marcus (@davidmarcus) March 20, 2023<\/a><\/p>\n<\/blockquote>\n Despite statements<\/a> from the FDIC to the contrary, Flagstar purchased Signature Bank without acquiring its cryptocurrency operations. Sources familiar with the sale had suggested<\/a> that divestment of crypto activities was required, but the FDIC insisted last week that it would not be necessary. The New York State Department of Financial Services also stated publicly<\/a> that Signature\u2019s shutdown was unrelated to cryptocurrency, prior to the FDIC\u2019s announcement. Former politician Barney Frank speculated<\/a> that the closure of Signature was intended to convey an \u201canti-crypto\u201d message.<\/p>\n The FDIC\u2019s press release on Monday stated that Flagstar Bank will not assume any of Signature Bank\u2019s cryptocurrency depositors or clients. \u201cFlagstar Bank\u2019s bid did not include approximately $4 billion of deposits related to the former Signature Bank\u2019s digital banking business,\u201d the FDIC announced. The agency also said that it will provide the deposits directly to customers associated with the digital banking business.<\/p>\n The FDIC\u2019s announcement on Monday sparked a discussion on social media, with some speculating that a conspiracy theory had been proven true. Caitlin Long, founder and CEO of Custodia Bank, tweeted<\/a> about the news: \u201cThey indeed kept out the crypto deposits. Investigation time.\u201d In addition to Flagstar not assuming Signature Bank\u2019s cryptocurrency deposits, the FDIC also noted that the government anticipates losses.<\/p>\n The FDIC estimated the cost of Signature Bank\u2019s failure to its Deposit Insurance Fund to be around $2.5 billion, according to the agency\u2019s announcement. \u201cThe exact cost will be determined when the FDIC terminates the receivership.\u201d In addition, the FDIC extended the bid window<\/a> for Silicon Valley Bank (SVB) on Monday. Bids for SVB\u2019s private bank are due on March 22, 2023, and bids for the bridge bank, Silicon Valley Bridge Bank, N.A., will be due two days later.<\/p>\nFDIC Expects $2.5 Billion Loss from Signature Bank Failure, Extends Bid Window for Silicon Valley Bank<\/h2>\n
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