The FDIC, the U.S. Federal Deposit Insurance Corporation, has recently announced that customers of Signature Bank who hold cryptocurrency accounts have until April 5th to close their accounts and withdraw their funds.
As of March 20th, Flagstar Bank has taken over the operation of 40 former Signature Bank branches.
However, only clients of Signature Bank who are not associated with the digital banking business were automatically transferred to Flagstar, which is owned by the New York Community Bancorp.
Deposits made to Flagstar are still FDIC insured, but it’s important to note that the Flagstar deal did not include around $4 billion in deposits linked to Signature’s cryptocurrency business.
The FDIC has advised customers to transfer these deposits before the deadline or else they will be sent checks to their registered addresses.
Signature Bank was established in 2021 and had over $110 billion in assets at the time of its collapse.
Although cryptocurrencies were not the primary focus of the bank, it started to deal with them towards the end of 2018, with cryptocurrencies accounting for about 23% of all deposits.
Signature was planning to reduce their share to 15%. Prior to the acquisition of Signature, there were reports in the media that the FDIC had set a condition for future buyers of the bank, requiring them to abandon the bank’s entire cryptocurrency business. The FDIC denied these rumors, however.