The US Federal Deposit Insurance Corporation (FDIC) has notified cryptocurrency companies with deposits at Signature Bank that their accounts must be closed and all funds withdrawn by April 5.
Signature Bank's 40 divisions were taken over by Flagstar Bank effective March 20. The agreement to acquire Signature's assets from Flagstar Bank did not include about $4 billion in deposits belonging to Signature's digital operations. The FDIC said it would guarantee access to these funds directly to their owners.
"We strongly advise customers to withdraw these deposits by April 5. If not, we will send cheques in their name by post," said a regulator spokesperson.
On March 12, regulators announced the closure of Signature Bank. The decision was taken due to "systemic risks" following the collapse of Silicon Valley Bank. However, according to Barney Frank, a Signature board member and former US congressman, the authorities had no valid purpose for closing the bank; the action was intended to convey "an extremely strong anti-cryptocurrency message".
Signature Bank's customers included many major cryptocurrency players - Coinbase had $240 million in accounts there at the time, Paxos, a stablecoin issuer, held $250 million in deposits there, and OKCoin's platform used it as the main channel for dollar transactions. After Signature Bank closed, OKCoin had no choice but to stop accepting dollar deposits and look for alternative financial institutions.
