Just a week after the collapse, the deposits and loans of the Signature Bank have been sold to Flagstar Bank- which is a subsidiary of the New York community Bancorp. But it is assumed that crypto-related deposits will not be a part of the total deposits.
The United States Federal Deposit Insurance Corporation had previously announced this agreement on the 19th of March, which would see close to $38.4 billion worth of non-cryptocurrency-related deposits, as well as $12.9 billion in loans being taken over by the bank based in Michigan- under a purchase and assumption agreement. From the 20th of March, the 40 branches of Signature Bank will also start operating as Flagstar Bank- where all the deposits that have been assumed by the bank will be insured up to an insurance limit of $250,000.
Flagstar Bank Will Carry Deposits of Signature Bank
This takeover deal from Flagstar Bank doesn’t, interestingly, include a sum of $4 billion of the deposits which are already held by the digital assets business of Signature Bank. Rather, the FDIC went on to confirm that it would be transferring the deposits to customers directly- ones who had already opened up a digital banking account.
The $4 billion figure will amount to 4.5% of the entire deposit worth $88.6 billion that the collapsed bank had on itself on the 31st of December. Paxos, Celsius, and Coinbase are the three crypto firms that have gone on board to confirm that they have had some exposure to Signature Bank.
Just the previous week, a report from Reuters went on to cite a couple of sources who had suggested that any buyer of Signature would have to divest most of the crypto activities as a viable rescue plan- something that Flagstar Bank has followed to the letter.