Signature Bank was liquidated by New York regulators

An institution that has operated many cryptocurrency companies has been shut down by state regulators.

New York-based Signature Bank was officially closed down and taken over by the New York Department of Financial Services. This news was announced in an official statement on March 12 this year. The US Federal Reserve (Fed) has appointed the Federal Deposit Insurance Corporation to act as trustee. This decision was made to protect the US economy and strengthen public confidence in the banking system.

Signature Bank was shut down by New York regulators

According to a statement published on March 12, Signature Bank, headquartered in New York, has been officially closed down and taken over by the New York Department of Financial Services. This message was released by Adrienne A. Harris.

The supervisory authority in question acquired Signature Bank in accordance with New York banking regulations and appointed the US Federal Deposit Insurance Corporation to handle the process related to the management of the bankrupt institution's assets.

The US central bank explained yesterday that the decision to close Signature Bank was made together with the New York regulator in order to protect the US economy as well as to strengthen public confidence in the banking system in the face of another high-profile bankruptcy in this sector.

Limiting the outflow of depositors

According to media reports, one member of the US Treasury Department revealed that the actions of the New York supervisory authority and the Fed were aimed at preventing the outflow of depositors and further bank insolvencies.

However, the American central bank assured that it protects all Signature Bank depositors. The institution also emphasized that the US taxpayer would not suffer any losses. According to the Fed, the banking system will continue to play its role in protecting deposits and providing access to credit for households and businesses in a way that promotes strong and sustainable economic growth in the US.

According to the same statement, both shareholders and some unsecured debt holders will not be protected. At the end of 2022, Signature Bank had $88.6 billion in deposits.

Last week, another cryptocurrency-friendly bank, Silvergate, announced it would be shutting down and voluntarily going into liquidation amid recent industry and regulatory difficulties. According to analysts, Signature Bank was able to more easily survive the cataclysm caused by the collapse of the FTX exchange due, among other things, to the fact that its depositors were much better diversified, and only 25% of deposits came from virtual currencies.