FDIC Bans Crypto Support by Failed Banks: Signature Bank Crypto Partners Now in Jeopardy

  1. FDIC warns rescuers not to support crypto services in failed US banks.
  2. Silicon Valley Bank and Signature Bank up for sale by FDIC.
  3. Any buyer of Signature must give up all crypto-related business at the bank.

The FDIC, which is responsible for the management of failed US banks, is reportedly warning potential rescuers not to support any crypto services. Reuters reported that the FDIC had asked banks that are interested in acquiring failed lenders, such as Silicon Valley Bank and Signature Bank, in submitting their bids by March 17. It will prioritize traditional lenders over private equity firms when accepting bids from banks with an existing bank charter.

The FDIC intends to sell the entire businesses of both Silicon Valley Bank and Signature. However, it will consider offers for parts of the banks if a whole company sale does not occur. Additionally, any buyer of Signature will be required to relinquish all cryptocurrency-related business at the bank.

Signature Bank is a prominent crypto-friendly bank in the United States, having partnered with major players in the crypto industry, including Coinbase exchange, Paxos Trust, BitGo, and Celsius. It was on March 12 that the New York State Department of Financial Services took over Signature Bank and officially closed it down. 

The FDIC, as the receiver, has transferred Signature Bank’s deposits and assets to Signature Bridge Bank, a full-service bank that the FDIC will run while seeking bidders for the institution.

In other news, the Euler Finance hacker returned 100 $ETH to a victim who pleaded for the return of their life savings, but their recent action of transferring funds into the crypto mixer Tornado Cash has raised questions about their motives.

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José is a crypto enthusiast who trades crypto night and day. He loves to share his trading stories and experiences in all his published articles. José likes to hang out and travel to meet new friends. Enjoys sushi, vodka, and tequila.