Takeaways
-
New York Bank authorities have shut down Signature Bank, a crypto-friendly bank.
-
Federal Reserve stated that the decision was made in order to protect the US’ economy and increase confidence in its banking system.
-
Signature Bank’s closure comes days after the collapse of the Silvergate Bank and the Silicon Valley Bank.
Another crypto-friendly banking institution has been shut down
Sunday’s announcement from the Federal Reserve stated that New York’s Signature Bank has been closed down by its state-chartered authority.
This latest cryptocurrency news means that Signature Bank is the third major bank to shut down operations within the space of a week.
In a statement On March 12, the Federal Reserve announced that Signature Bank had been closed down. This decision was made in conjunction with the United States Federal Deposit Insurance Corporation.
The United States’ top bank also stated that they would protect all Signature Bank depositors. Federal Reserve wrote
“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 at this institution will be compensated. The taxpayer will not be responsible for any losses, just as with Silicon Valley Bank’s resolution.
The protection of shareholders and certain unsecured debt holders will be removed. The senior management was also removed. Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.”
Federal Reserve explained that this move was designed to protect deposits and provide credit to households and businesses. It also promotes strong, sustainable economic growth.
The crypto market remains resilient
According to the Fed, shareholders and certain unsecured creditors would not be protected.
Signature Bank’s shutdown makes it the third major bank to close operations within the space of a week. On March 9th, crypto-friendly bank Silvergate shut down its operations and voluntarily liquidated its assets. The bank stated that it made this decision in light industry and regulatory developments.
Silicon Valley Bank, a bank that was important for crypto and tech startups, also fell last week. The crypto market is resilient, however.
After falling below $19k last week, Bitcoin traded up nearly 10% to trade at $22k on Sunday. Despite the continuing FUD in cryptocurrency markets, the total cryptocurrency market capital is now at $1 trillion.
