Regulators close Signature Bank, marking the third US bank to fail within a week

Signature, a large crypto bank, has disappeared due to "systemic risk" according to the Treasury, FDIC, and Federal Reserve. Depositors of Silicon Valley Bank have been assured that they will be able to access all of their funds on Monday.

New York regulators have shut down Signature Bank, one of the top destinations in the US for cryptocurrency companies. The closure follows the collapse of two other major banks in the space of a week, causing concern among investors. In a joint statement, the Treasury, Federal Reserve, and Federal Deposit Insurance Corporation assured depositors that they will be protected beyond the $250,000 guaranteed by the FDIC. Signature Bank held $88.59 billion in deposits as of December 31, 2022, and the New York Department of Financial Services has taken over control of the bank.

Signature Bank was one of two banks widely used in cryptocurrency, allowing crypto companies to transfer dollars in real-time, similar to Silvergate, which also collapsed on March 8th. The loss of both crypto banks may make it more difficult for companies to convert back into dollars. Coinbase, a popular crypto exchange, had $240 million in cash at Signature Bank, but will now use other banking partners for client transactions.

The regulators' announcement also included news that depositors at Silicon Valley Bank will be protected, which is good news for crypto, as Circle, a stablecoin provider, had $3.3 billion of its reserves there. Circle will now use BNY Mellon instead. In addition, the regulators stated that depositors of Silicon Valley Bank, a non-crypto bank that failed on March 10 following a bank run, will have access to their uninsured deposits on Monday. Both cases will not result in losses paid for by taxes, according to the statement.