A hearing to look into the failure of #SVB and #SignatureBank has been planned by the US House Financial Services Commission, and witnesses from the Federal Reserve and Federal Deposit Insurance Corporation are expected to give testimony on March 29.

Martin Gruenberg, the head of the FDIC, and Michael Barr, the vice chair for supervision at the Fed, are anticipated to testify. Representatives Maxine Waters and Patrick McHenry initiated the hearing. They said that this hearing will aid the committee in comprehending the causes and circumstances surrounding the failure of the banks.

Earlier this month, on March 10, Silicon Valley Bank collapsed as a result of a bank run by significant depositors. To protect the majority of uninsured depositors, the government intervened, though. As it closed on March 12, Signature Bank apparently had no solvency difficulties. When New York regulators intervened, they turned the bank's insurance operations over to the FDIC.

As a result of the bank failure, several MPs have suggested that exposure to #cryptocurrency enterprises may be to blame. Advocates for the space, meanwhile, have asserted that officials were attempting to "de-bank" cryptocurrency and #blockchain firms. A report on the Fed's oversight and control of Silicon Valley Bank is anticipated from Barr. The Securities and Exchange Commission and Department of Justice are allegedly both starting their own investigations into the decisions made by some of the bank's officials prior to its collapse.

It has been stated by the House Financial Services Committee that it intends to hold several hearings.

#Flagstar Bank has agreed to buy #SignatureBank in a deal that does not include the bank's #cryptocurrency deposits. Several pundits have accused the US government of advancing an anti-crypto agenda as a result of the decision.

The Federal Deposit Insurance Corporation (FDIC) announced a purchase deal with Flagstar Bank, a subsidiary of New York Community Bancorp, Inc. The Signature bank's "essentially all deposits and some loan portfolios" are included in the transaction.

Nevertheless, the acquisition excludes $4 billion in deposits from Signature Bank's crypto-related businesses. Instead, the FDIC stated that the deposits would be returned to clients immediately.

FDIC Receivership Signet

Together with Web3 business deposits, the agreement excludes Signature Bank's payment network, Signet. It was used by many Web3 businesses, including Circle, the creator of the stablecoin USDC.

An FDIC representative confirmed to Bloomberg that Signet will stay under the agency's authority and "will be subject to later arrangement."

Reuters report that the regulators requested the bidders to "give up all the #crypto operations" at the Signature bank. The FDIC later stated that this was false. Now, venture capitalist Nic Carter believes that the FDIC lied and that Reuters was correct. Carter is also certain that regulators have launched Operation Choke Point 2.0 in order to restrict crypto companies' access to banking.

The Signature Bank Has Reopened

Flagstar took over ownership of 40 Signature Bank locations on Monday. A subsidiary of New York Community Bancorp purchased $38.4 billion in assets and $12.9 billion in loans at a $2.7 billion discount. The agreement also excludes around $60 billion in debts that are still under #FDIC receivership. The FDIC acquired common shares with a potential value of up to $300 million as part of the arrangement.

The Federal Reserve liquidated the Signature bank on March 12 to "defend the US economy," however some believe the closure was for political purposes because the bank was solvent.

The #SVB and #SignatureBank bid deadline has been set by the #FDIC on March 17. Buyers must discontinue any cryptocurrency-related business.

Financial institutions interested in purchasing Silicon Valley Bank and Signature Bank before they go out of business have until Friday, March 17, according to FDIC officials.

Selling Silicon Valley Bank and Signature Bank completely is the aim. Consider selling some of the shares of the two banks if you can't sell it all.

To provide donors an advantage over private equity firms, only bidders with active bank charters are permitted to review banks' financials before submitting their offers.

According to rumors, the buyer of Signature Bank will have to consent to giving up all of the bank's cryptocurrency operations.

Regulators have highlighted that Signature Bank's closure is due to a crisis of confidence in its management, not connection with #cryptocurrency startups, despite the bank's reputation as one of two crypto-friendly banks. Its leadership nevertheless views it as a campaign to stop banks from working with cryptocurrency service providers.

Silicon Valley Bank, Signature Bank, and Piper Sandler, the company in charge of the auction, all promptly reacted to demands for comment, but the FDIC declined to speak on its behalf.

After authorities took over Silicon Valley Bank (SVB) on Friday and Signature Bank (SBNY.O) on Sunday, in a turbulent weekend that rippled throughout the whole global financial system, the latest auctions demonstrate how the FDIC is working in tandem to return lenders to the private sector.

Announcing the acquisition of the assets of Signature Bank, including its $36 billion in debt and subprime lending activities, is New York Community Bancorp. One of the largest purchases in the #banking industry in recent years, the deal is projected to be worth $38 billion.

New York Community Bancorp said in a statement that it will put a lot of effort into servicing subprime loans for clients of Signature Bank. The action is intended to boost the bank's position in the market for subprime loans, which has been expanding quickly in recent years.

The acquisition is anticipated to have a beneficial economic impact on New York City since it will increase local employment possibilities. The #FDIC has also said that, with the exception of digital bank accounts, #SignatureBank deposits would be accepted by subsidiaries of New York Community Bank.

John Smith, the CEO of New York Community Bank, expressed his joy about the purchase and said that it marks a significant turning point for the bank. He said,

“we are thrilled to announce the acquisition of Signature Bank’s assets, which will help us strengthen our position in the subprime lending market and expand our customer base.”

Customers of Signature Bank will gain from the purchase as they now have access to a greater choice of financial goods and services. The action is a component of New York Community Bancorp's plan to expand its operations and gain market share in the banking industry.

The transaction, which has received board approval from both New York Community Bancorp and Signature Bank, is anticipated to close before the end of the year. The two banks have guaranteed their clients that there won't be any interruptions in financial services throughout the transfer.

Michael Burry, who gained notoriety for shorting the mortgage bond market in 2007, is indicating that the market may be nearing a bottom at the moment. This follows his prior claim that the current situation is comparable to the banking crises of 2003 and 2008. Burry made a comparison between the current situation and the 'stupid' risks that led to the demise of the #SVB and #SignatureBank .

The trader cited the instance of #JPMorgan making a financial commitment during the Knickerbocker Crisis in 1907 as an illustration. The US regulators stepped in to preserve consumer savings in the wake of #SiliconValley Bank's failure. Therefore he made a subliminal allusion to the possibility that the markets would bottom as a result of this intervention, similar to the JP Morgan move. Given the current behavior, does this imply that the price of Bitcoin will continue to rise?

“In October 1907, Knickerbocker Trust failed due to risky bets, sparking a panic. Two others soon failed, and it spread. When a run began on a healthy Trust, J.P. Morgan made a stand. 3 weeks later the Panic resolved & markets bottomed. A stand was made this past weekend.”

Yet this runs directly counter to his most recent assertion that the financial issue may be resolved rapidly. He said that there was no real threat present.

In an effort to locate purchasers for Silicon Valley Bank, the Federal Deposit Insurance Corp. (FDIC) is now seeking to conduct an auction procedure. Once Bitcoin crossed the $26,000 barrier on Tuesday, the #cryptocurrency market began to exhibit an adverse association with the American financial industry. Hence, if a market crash occurs, will Bitcoin surpass $30,000 in the upcoming weeks?

A chance for Europe to profit from the crisis arises as #crypto companies in the US look for alternatives to #Silvergate and #SignatureBank .

In terms of crypto innovation, Europe has at times found it difficult to stay up with the United States. It has seemed that the U.S. has been the core of cryptocurrency from its birth, whether that be through stablecoins, trade volumes, or adoption.

However, the longer it takes for U.S. banks to declare that they are open for crypto business—that is, willing to accept some of the millions of dollars that were once parked at Silvergate—the more likely it is that crypto firms will choose a location like Europe, where regulations are more transparent and fiat payment rails are simpler.

The Markets in Crypto-Assets Act (MiCA), which provides legal clarity in Europe, stands in stark contrast to the murky regulatory landscape in the United States, where businesses appear to encounter new regulatory challenges every day. Any crypto organization's operations are put in an atmosphere that is getting more difficult as a result. This will be an important factor to take into account for both new and existing market participants.

Additionally, it appears that American politicians are making every effort to stifle dollar on-ramps into cryptocurrencies, leaving the door wide open for other countries to surpass the U.S. in terms of competitiveness.

The good news for investors is that the crypto business has become less dependent on fiat currency over the past few years when it comes to trading. Following the Silvergate issues last week, the percentage of market share of all volume on centralized exchanges for #Stablecoins has actually just risen to an all-time high as investors continue to favor stablecoins over conventional currency. Stablecoins now account for the great bulk of exchange volume, up from 79% to over 90% in only the last year.

Because there is less reliance on money, crypto investors are less negatively impacted by the U.S. banking shutdown. Stablecoins are becoming more and more popular among cryptocurrency investors as a medium of exchange, but not with the companies who run the trading platforms. These institutions will be the ones to suffer the most from a dollar (USD) shutdown first.

Without access to a U.S. bank, organizations like exchanges will need to modify the services they provide. Consider trading hours: If an exchange does not have access to USD payment networks that are available around-the-clock, it is very possible that it will only be able to serve consumers during U.S. trading hours. In this case, the opportunity cost of foregone trading tactics outside of trading hours might also hurt investment funds with U.S.-based investors.

Profits In Euros

Yet, Euro volumes demonstrate that what hurts one region, helps another. Early signs point to the euro perhaps benefiting greatly from a U.S. crypto banking ban, with volumes for the BTC-EUR pair surging as the Silvergate issues continued. The market share of the bitcoin-euro pair in relation to the US dollar reached a record high last week, jumping to 21% of BTC volumes from 7% in November.

Will a U.S. bank raise its hand to accept cryptocurrency deposits at this point? The trend of increasing euro volumes may continue if the response is no, at least not for a time.

The big question in the US is whether a bank will raise its hand. Given the consolidation of larger banks that we are currently witnessing in the banking industry, the bigger banks currently have no need to accept crypto deposits.

Smaller banks are those who need to draw in a new influx of deposits since they are struggling to compete in a market that is becoming more and more oligopolistic with companies like #JPMorgan Chase. In a perfect scenario, multiple smaller banks would accept cryptocurrency, distributing the risk more fairly across a few different institutions rather than having all cryptocurrency deposits concentrated in just a few, as it was in the past.

It might be some time before the next group of banks opens its doors to cryptocurrency since the smaller banks will view Silvergate and Signature as a glaring illustration of institutions who were unable to diversify their deposits to the extent that would have provided some protection against a bank run.

This creates a window of opportunity for Europe and the euro to establish themselves in a sector where they have recently lagged behind.