Flagstar takes over Signature, minus the crypto business

After an unsuccessful initial attempt by the FDIC to find a buyer for Signature Bank, the latter, which has been put into receivership by the IRS, will be bought out by Flagsta Bank – a subsidiary of New York Community Bancorp, Inc.

Disposal of crypto was not required

A Reuters report, which was later updated to reflect a statement on the matter from the FDIC, said unnamed sources stated that any buyer of Signature Bank would be forced to sell out of the crypto industry. The FDIC responded that it was only warning potential buyers of the risks of dealing in crypto and not requiring potential buyers to drop the asset class.

Whether necessary or not, Flagstar Bank has made the decision to exclude cryptocurrency-related customers from the deposits it took control of. Most of Signature’s assets will remain in the hands of the FDIC for the time being, which also received an equity boost in the form of common stock in Flagstar’s parent company worth about $300 million as part of the deal.

“The former Signature Bank had total deposits of $88.6 billion and assets of $110.4 billion. Today’s transaction included the purchase of approximately $38.4 billion of Signature Bridge Bank, NA’s assets, including $12.9 billion in loans purchased at a discount of $2.7 billion. About $60 billion in loans will remain in the estate for later disposition by the FDIC.

Signet payment network again

Considering the fact that only a fraction of Signature’s deposits and assets were acquired by Flagstar, the abandonment of crypto customers could have been considered a mere coincidence. However, Flagstar’s sales from industry also include operations.

Signet, a real-time payment network built specifically for crypto customers, has been put into receivership at the FDIC, according to Bloomberg. The sale of the payment network, together with other assets and deposits that belonged to the now defunct Signature Bank, will take place at a later date.

After a week of uncertainty, Signature Bank’s 40 branches have reopened today. All customers are requested to carry out their daily banking operations as they did before until Flagstar Bank advises otherwise.

At the moment, it appears that the Signet is still operational, despite the reception. However, it is unclear how long it will continue to process payments, and Circle has already moved its operations to BNY Mellon.