Signature Bank is closed by regulators after SVB

Another crypto-friendly bank was forced to close its doors: Signature Bank, the bank that numerous cryptocurrency firms pulled out of after Silvergate revealed operational difficulties earlier this month.

As with Silicon Valley Bank (SVB), the US government has agreed to fully bail out the company’s depositors as part of a “systemic risk exception.”

• in a joint declaration from the Federal Reserve, the Treasury Department, and the Federal Deposit Insurance Corporation, the parties clarified that taxpayers would not bear losses associated with the bank, as would BLS.

• “Shareholders and certain unsecured debt holders will not be protected,” the statement read. “Senior management has also been eliminated.”

• The Fed said that the measures taken are to strengthen public confidence in the banking system and ensure that it can continue to play its vital role in the economy.
• According to the financial times, Signature Bank managers were shocked to see that their bank was in receivership. The company faced a flurry of exits alongside a major share sell-off on Friday due to the panic surrounding SVB, but the former reportedly leveled off on Sunday.
• Signature Bank was from Coinbase bank of choice when Silvergate began to show signs of financial trouble, such as with LedgerX.
• On the contrary, Kraken he distanced himself from Signature earlier this month when it stopped processing transactions for non-corporate clients through the bank.
• Circle, the issuer of the second-largest stablecoin USDC, had exposure to Silvergate, Signature and SVB as of January, according to its January audit.
• The firm managed to bail out its reserves from Silvergate before the bank went into voluntary liquidation on Thursday. However, on Friday it temporarily lost $3.3 billion in cash within SVB, causing USDC to lose its peg.
• USDC has since returned above $0.99 after Circle CEO Jeremy Allaire confirmed that all reserves of the token had been recovered and will be transferred to BNY Melon.