A spokesperson from the Federal Deposit Insurance Corp. has unveiled the federal regulator’s plan on selling the collapsed Signature Bank’s real-time cryptocurrency payment network – Signet. Aside from that, the Federal Deposit Insurance Corp. have also urged crypto depositors at Signature to close their accounts and move their funds by April 5.
FDIC on the Signature Bank’s Case
In which the federal regulator’s spokesperson has warned that if the said customers with deposits that were not absorbed by Flagstar have failed to move their money by then, the Federal Deposit Insurance Corp. will mail a check to their address of record.
Owned by New York Community Bancorp is the bank Flagstar. The Federal Deposit Insurance Corporation, which had already taken over Signature Bank on March 12 as a result of a run on its accounts, had recently been acquired by the aforementioned bank.
This is a component of a bigger problem involving regional banks that is still causing the financial world to tremble. In light of this, it is vital to note that Signet, a crucial platform for the cryptocurrency industry, and nearly $4 billion in digital assets were excluded from that transaction.
Signet’s Role
Signet is regarded as a proprietary payment network that enables real-time payments from business crypto clients every single day of the week. Signet has replaced Silvergate as the only option for many businesses to transmit payments to exchanges, and vendors, or to conduct administrative tasks like paying employees since Silvergate – another well-known bank in the cryptocurrency space – went on a voluntary liquidation earlier this month.
On the other hand, PYMNTS has noted that the industry may be left with no choice but to seek other locations and jurisdictions as a result of the crucial de-banking of cryptocurrency from 24/7 Transmission rails, according to sector observers.
Banks in the Crypto Space
Because of the failure of one of the main crypto exchange platforms, FTX, Signature Bank has begun to withdraw from the digital asset market. Yet, the action does not change the reality that it still has substantial deposits from some of the industry’s most powerful players.
Some institutions, on the other hand, have begun to embrace crypto players in light of the recent banking crisis. According to Rich Rosenblum, president and co-founder of crypto trading platform GSR, dozens of institutions, both onshore and offshore, are taking advantage of this opportunity.
