In a hearing held by the U.S. House of Representatives, Federal Deposit Insurance Corporation (FDIC) Chairman Martin Gruenberg testified that approximately $4 billion in deposits related to cryptocurrency businesses of the failed Signature Bank would be returned to depositors by early April.
The FDIC announced that New York Community Bancorp (NYCB) would acquire some of Signature Bank’s deposits and assets, excluding the crypto-related assets, which would be returned to depositors. Customers holding funds in Signature Banks will be contacted by the FDIC and have until April 5 to transfer their assets or accept account closure measures.
Gruenberg clarified that the decision not to include cryptocurrency-related assets in the acquisition was the choice of NYCB, the winning bidder. Republican Rep. Tom Emmer, a well-known cryptocurrency advocate, expressed his interest in confirming the sale of Signet, a payment network dedicated to Signature Bank’s cryptocurrency clients, as it is an asset of great value.
The closure of Signature Bank by the New York State Department of Financial Services (NYDFS) to avoid a financial system crisis after the failure of Silicon Valley Bank (SVB) has been criticized by former Republican congressman Barney Frank and Ryan Selkis, founder of blockchain analytics firm Messari.
They accused regulators of targeting Signature Bank to show their opposition to virtual currencies. However, Treasury Undersecretary for Domestic Finance Nellie Liang testified that she did not believe cryptocurrencies played a direct role in the collapse of Signature Bank and SVB.
The acquisition of SVB by First Citizens Bank included all assets, including cryptocurrency-related deposits. Gruenberg denied Emmer’s claim that the FDIC might increase scrutiny of retaining or taking on new cryptocurrency customers.
Overall, the testimony given by the regulators shed light on the handling of bank failures and the role of cryptocurrency-related assets in the collapse of banks. It remains to be seen how the sale of Signet will impact the crypto industry and if any further scrutiny will be imposed on retaining or taking on new cryptocurrency customers.
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This article was republished from azcoinnews.com
