Flagstar Bank acquired Signature Bank but fully ignores crypto customers

FDIC confirmed that services of Signature Bank will resume as usual under the name & roof of Flagstar Bank.

Signature Bank was a popular US-based bank. Around a week ago, this bank failed to provide services because of a bad financial position. The Federal Deposit Insurance Corporation (FDIC) took over the control of the bank and successfully reached an agreement with Flagstar Bank. 

On 20 March 2023, The FDIC agency confirmed that the usual deposit & withdrawal services for Signature Bank account holders have been started under the name of Flagstar Bank, which purchased the assets of collapsed bank “Signature Bank”. 

Here Flagstar Bank will continue to be insured up until the $250,000 insurance limit for all former Signature Bank holders. 

This bank will handle Signature Bank’s $88.6 billion liabilities including $12.9 billion in loans taken over by the Michigan-based bank under a “purchase and assumption agreement.

Crypto customers of Signature Bank will surely face disappointment with Flagstar Bank, as Flagstar will not support Signature Bank’s crypto depositors. It means, Flagstar will not allow crypto customers in its banking services.

FDIC will directly transfer all the crypto customers’ deposits to their digital bank accounts.

Announcement read:

“The FDIC will provide these deposits directly to customers whose accounts are associated with the digital banking business.”

Approximately 4.5% of deposits in the Signature Bank were from Crypto companies/entities. In the last week, some top popular crypto companies e.g Coinbase, Celsius, and Paxos confirmed that they had significant exposure with Signature Bank. 

Just a few days ago, giant news media Reuters reported that FDIC will kick out crypto customers of the bank & planned to revive the non-crypto customers only. FDIC officially responded to the Renter’s report and denied such allegations. 

Castle Island Ventures partner Nic Carter responded to the whole game happening and said that Reuters was correct & FDIC was lying. 

Read also: Bitcoin ATM manufacturer General Bytes’ cloud server compromised

Flagstar Bank acquired Signature Bank but fully ignores crypto customers

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