FDIC Gives Signature’s Crypto Clients Until April 5th To Close Their Accounts

The Federal Deposit Insurance Corporation (FDIC) informed the Signature Bank’s crypto clients that they have a week to move their funds and close their accounts in the fallen bank.

According to a Bloomberg report, the FDIC spokesperson made the announcement on March 28th, calling on all the investors whose deposits are excluded from the bank's acquisition deal.

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FDIC entered into a purchase and assumption agreement with New York Community Bancorp (NYCB) subsidiary Flagstar Bank to sell Signature Bank – with all the remaining deposits and several loan portfolios. The deal, however, excluded around $4 billion in deposits, which “belonged to digital asset clients.”

The FDIC has been urging the clients connected to these funds to find another bank to move them to.

However, the federal regulator has now given a deadline after which it will close all the remaining accounts and mail checks to the depositors’ registered addresses. Clients who cannot transfer their deposits should ensure that their registered addresses are correct. 

Signature’s real-time payment platform, Signet, was also excluded from the NYCB’s bid. Signet was to continue operating under Signature Bridge Bank, a new temporary entity supervised by the FDIC.

The troubled Signature Bank was closed on March 12th, with FDIC appointed as the receiver. The agency put the bank on sale, giving bidders until March 17th to submit bids. 

FIDIC denied previous reports claiming that the agency ordered Signature Bank bidders to give up the crypto business. However, US regulators have expressed resistance toward crypto-related dealings.

It remains uncertain how easily the former customers of Signature Bank will find other financial institutions willing to take their crypto assets.