Signature Bank went out of business in March after a bank run caused by the failure of other crypto-friendly financial institutions, Silicon Valley Bank and Silvergate Bank. While the outflow of deposits greatly contributed to Signature’s doom, FDIC says that the collapse was mainly because of the bad practice the bank had.

The report says that Signature’s management failed to act on FDIC’s recommendations while also pursuing “rapid, unrestrained growth without developing and maintaining adequate risk management practices.” The bank also didn’t do itself any favors by keeping 90% of its deposits uninsured.

Another contributing factor was Signature’s involvement in the crypto industry without fully understanding the associated risks. More than 20% of the bank’s deposits were tied to crypto in some way, making the bank vulnerable to the volatility of the crypto market.

“When that industry started to turn, and interest rates started to rise, those deposits started leaving the bank,” explained FDIC’s chief risk officer Marshall Gentry. “Even though they were crypto cash deposits, it was a traditional kind of bank run.”

After Signature Bank went into FDIC receivership, most of its assets were sold to New York Community Bancorp (NYCB). Most of the locations and clients of Signature were absorbed by NYCB’s subsidiary Flagstar Bank.

The post Signature Bank Collapsed Due to “Poor Management” Says Latest Report appeared first on theprimarymarket.com.

Signature was closed by regulators in early March after clients withdrew more than $10 billion in deposits following the collapse of Silicon Valley Bank, another crypto-friendly institution. A week later, the majority of the bank’s assets were acquired by New York Community Bancorp and its subsidiary Flagstar Bank.

However, the assets related to cryptocurrency businesses were left out of the deal. FDIC was left sitting on $4 billion in deposits related to digital assets and wants them out of their hands.

FDIC’s deputy director of communications David Barr told Forbes in a mail exchange that the agency will mail check to the companies that fail to meet the deadline.

“If the customers with deposits not assumed by Flagstar Bank have not moved their money by then, the FDIC will mail a check to their address of record,” said Barr.

The agreement with Flagstar Bank also left FDIC with around $60 billion of Signature Bank’s loans. These assets will most likely be moved in a separate deal for a large discount.

The post FDIC Gives Signature’s Crypto Customers a Deadline to Move Their Funds appeared first on theprimarymarket.com.

Signature Bank went out of business in March after a bank run caused by the failure of other crypto-friendly financial institutions, Silicon Valley Bank and Silvergate Bank. While the outflow of deposits greatly contributed to Signature’s doom, FDIC says that the collapse was mainly because of the bad practice the bank had.

The report says that Signature’s management failed to act on FDIC’s recommendations while also pursuing “rapid, unrestrained growth without developing and maintaining adequate risk management practices.” The bank also didn’t do itself any favors by keeping 90% of its deposits uninsured.

Another contributing factor was Signature’s involvement in the crypto industry without fully understanding the associated risks. More than 20% of the bank’s deposits were tied to crypto in some way, making the bank vulnerable to the volatility of the crypto market.

“When that industry started to turn, and interest rates started to rise, those deposits started leaving the bank,” explained FDIC’s chief risk officer Marshall Gentry. “Even though they were crypto cash deposits, it was a traditional kind of bank run.”

After Signature Bank went into FDIC receivership, most of its assets were sold to New York Community Bancorp (NYCB). Most of the locations and clients of Signature were absorbed by NYCB’s subsidiary Flagstar Bank.

The post Signature Bank Collapsed Due to “Poor Management” Says Latest Report appeared first on theprimarymarket.com.

Signature was closed by regulators in early March after clients withdrew more than $10 billion in deposits following the collapse of Silicon Valley Bank, another crypto-friendly institution. A week later, the majority of the bank’s assets were acquired by New York Community Bancorp and its subsidiary Flagstar Bank.

However, the assets related to cryptocurrency businesses were left out of the deal. FDIC was left sitting on $4 billion in deposits related to digital assets and wants them out of their hands.

FDIC’s deputy director of communications David Barr told Forbes in a mail exchange that the agency will mail check to the companies that fail to meet the deadline.

“If the customers with deposits not assumed by Flagstar Bank have not moved their money by then, the FDIC will mail a check to their address of record,” said Barr.

The agreement with Flagstar Bank also left FDIC with around $60 billion of Signature Bank’s loans. These assets will most likely be moved in a separate deal for a large discount.

The post FDIC Gives Signature’s Crypto Customers a Deadline to Move Their Funds appeared first on theprimarymarket.com.