FDIC Plans to Return $4B in Signature Crypto Deposits ‘Early Next Week’ – Martin Gruenberg
Martin Gruenberg, chairman of the United States Federal Deposit Insurance Corporation, has said the agency plans to return about $4 billion in deposits linked to Signature Bank’s digital asset banking business by early April.
In a March 29 hearing of the US House Financial Services Committee examining federal regulators’ response to recent bank failures, Gruenberg said the deposits not included in the bid by a New York Community Bancorp subsidiary for Signature would be returned early next week. There are $4 billion in deposits tied to digital assets, and reports had indicated that the FDIC would close all crypto-related accounts that are not part of the NYCB agreement by April 5 if depositors did not move their money.
According to Gruenberg, Signature’s payments platform Signet — which, along with the digital asset deposits, was not included in the NYCB bid — was “in the process of being marketed now” to potential buyers. The FDIC, along with financial regulators in New York, shut down the crypto-friendly bank on March 12, citing risks to the US economy after Silicon Valley Bank and Silvergate Bank failed.
Nellie Liang, undersecretary for domestic finance at the US Treasury Department, said she did not believe crypto “played a direct role” in the failure of either Signature or Silicon Valley Bank:
“I know Signature had activities involved in digital assets, but I don’t think that’s the main thing [cause].”
The March 29 hearing marked the second time Liang, Gruenberg and Fed Deputy Chairman for Supervision Michael Barr addressed lawmakers following the collapse of three major US banks. The Senate Banking Committee held a hearing on March 28, where Gruenberg said Silvergate Bank had failed to address risks that led to its failure.
Related: US explores ways to guarantee country’s 18T of bank deposits: Report
Although some lawmakers and regulators have apparently pointed to the banks’ ties to digital asset companies, many have criticized the association for being without profit. Former House of Representatives member and signature board member Barney Frank has said officials wanted to send a “very strong anti-crypto message,” claiming the bank had no solvency issues at the time of the shutdown.
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