Signature Bank’s clients to close accounts – FDIC

The US Federal Deposit Insurance Corp (FDIC) has instructed clients of collapsed lender Signature Bank’s cryptocurrency business to close their accounts and transfer their funds by April 5. These deposits were not included in the rescue deal that was made with Flagstar Bank, a unit of New York Community Bancorp, earlier this month.

According to an FDIC spokesperson, Flagstar’s bid did not include the $4 billion in deposits related to Signature’s digital-asset business, and the customers are being encouraged to move their deposits before the deadline. The FDIC will mail checks to the address on record if the customers fail to move their funds by April 5.

Flagstar entered into an agreement with US regulators on March 19 to purchase deposits and loans from Signature Bank. The FDIC has stated that the deal involves Flagstar Bank assuming most of Signature Bank’s deposits, some of its loan portfolios, and all 40 of its former branches. Signature Bank will retain roughly $60 billion of its loans and $4 billion of its deposits in receivership.

The move to close Signature Bank’s crypto accounts is part of the broader effort to resolve the bank’s financial issues and ensure the smooth functioning of the banking system. The FDIC’s decision to encourage customers to move their deposits reflects its commitment to maintaining the integrity of the banking system and protecting the interests of depositors.