FDIC gives Signature crypto customers deadline to close accounts

Signature Bank’s crypto clients have been given a deadline to close down their accounts and move their deposits following the recent takeover of the bank. 

According to Bloomberg, the US Federal Deposit Insurance Corporation (FDIC) informed customers of the failed Signature Bank to close their accounts and move their deposits by April 2023. Depositors who fail to take the necessary action before the deadline will have their accounts automatically closed and their checks mailed to them.  

Following the collapse of Signature Bank earlier in March 2023, there were reports that the FDIC stated that any interested buyer of the financial institution would cease all crypto-related operations, a report the regulator denied. 

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Shortly after, Flagstar Bank, a New York Community Bancorp subsidiary, entered an agreement with the FDIC to purchase most deposits and certain loans of Signature Bank. However, cryptocurrency clients’ deposits worth $4 billion and Signet, Signature’s real-time payments network used by the bank’s institutional crypto customers, were excluded from the deal.

The failure of Signature, along with Silvergate and Silicon Valley Bank, may create more bottlenecks for crypto companies trying to open accounts at traditional financial institutions. 

Meanwhile, Signature’s Signet remains in FDIC receivership, with the agency yet to give information about the future of the payments network. Coinbase also indefinitely suspended support for Signet.

Read more: Signature bank was under criminal investigation ahead of closure