FDIC Asks Signature Bank's Crypto Clients To Close Accounts And Shift Money By April 5

The Federal Deposit Insurance Corporation, or FDIC, has reportedly informed collapsed lender Signature Bank's (OTC:SBNY) crypto clients they have until April 5 to close their accounts and shift their funds.

What Happened: The deposits in question were not part of a rescue deal with Flagstar Bank, a unit of New York Community Bancorp Inc. (NYSE:NYCB), reported Reuters.

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"Flagstar’s bid did not include about $4 billion in deposits related to Signature’s digital-asset business," a spokesperson for FDIC said, according to the report.

“Those are the deposits we are encouraging customers to move before April 5. If they have not by that day, we will mail checks to the address on record,” the spokesperson added.

The Deal: Last week, Flagstar had entered into an agreement with U.S. regulators to buy deposits and loans from Signature Bank. FDIC had said depositors of Signature Bridge Bank, other than those related to the digital banking business, will automatically become depositors of the assuming institution.

“As of Dec. 31, 2022, the former Signature Bank had total deposits of $88.6 billion and total assets of $110.4 billion. Today's transaction included the purchase of about $38.4 billion of Signature Bridge Bank, N.A.'s assets, including loans of $12.9 billion purchased at a discount of $2.7 billion,” FDIC had explained.

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