The U.S. Federal Deposit Insurance Corp (FDIC) has directed customers of failed lender Signature Bank to close their cryptocurrency accounts and withdraw their funds by April 5. The move is aimed at protecting depositors from risks associated with crypto-related activities.
FDIC Moves to Protect Depositors From Risks Associated with Crypto
According to reports, the FDIC sold what was left of Signature Bank to New York Community Bancorp, but the deal did not include some $4 billion in crypto-related deposits, nor the bank’s Signet real-time transactions. As a result, the FDIC has informed Signature Bank’s crypto clients to find another bank or have their accounts closed.
The FDIC’s decision is believed to be a preemptive move to protect depositors who are exposed to the bank’s crypto-related risks. It also highlights the challenges faced by regulators in managing the risks associated with digital assets.
Signature Bank is not the only bank to have faced issues related to cryptocurrencies. Several other banks have collapsed or faced regulatory action due to similar issues. The FDIC’s move to close the accounts of Signature Bank’s crypto clients serves as a reminder to the banking industry to remain vigilant in managing crypto-related risks.
In conclusion, the U.S. Federal Deposit Insurance Corp’s decision to tell Signature Bank’s crypto clients to withdraw their funds by April 5 is a timely reminder to the wider banking industry to stay on top of the risks associated with digital assets. By taking steps to protect depositors, regulators can help to prevent similar collapses and regulatory actions in the future.