Investors are alarmed because this is the 3rd large bank to fail in the past week. The joint statement that depositor protection will extend over the $250,000 FDIC-guaranteed limit appears to be designed to ensure banking clients that their funds won’t be seized. By December 31, 2022, Signature had $88.59 billion in funds. The bank is now under the control of the New York Department of Financial Services.
One of the 2 banks that were frequently used in cryptocurrencies was Signature. Similar to Silvergate, which failed on March 8th, Signature’s platform enabled real-time dollar transfers between cryptocurrency companies. With both crypto banks gone, returning to dollars might be more difficult.
Furthermore, according to the Fed’s announcement, Silicon Valley Bank investors would also be paid in full. As stablecoin provider Circle kept $3.3 billion of its deposits there, this is good news for the cryptocurrency market. Circle manages USDC, a cryptocurrency payment tool that is always expected to be worth $1.
The authorities also stated that Silicon Valley Bank investors, a non-crypto bank that closed on March 10 as a result of a bank run, can have accessibility to their covered accounts starting on Monday. It was stated that taxes would cover no damages in any situation.
