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Failed Signature Bank Clients Now must Close Accounts In One Week. What Now

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The cryptocurrency firms and depositors at shuttered Signature bank have received a mandate to close their accounts.

The United States FDIC (Federal Deposit Insurance Corp.) mandated the crypto clients of the failed Signature bank who deposited with the bank to close it all until April 5. The takeover by the FDIC came after the SVB and Silvergate collapse.

According to Bloomberg, the FDIC spokesman said on March 28 that all the cryptocurrency deposits not transferred out by the customers will be liquidated by April 5.

The clients will only receive a check at their mail address after the deed is done. This notice came after the New York Community Bancorp bought most of Signature bank’s loans and deposits.

After the regulators placed the collapsed bank in receivership, the bidding process for the remaining business activities related to the company commenced.

The decision must be related to the ongoing investigations into Signature bank’s dealings.

Mandate Comes After Important Discoveries

Investigations show that the deposits weren’t included in the rescue deal made with Flagstar bank, a sub-division of NYCB (New York Community Bancorp), earlier in March.

According to the FDIC spokesperson, the bid made by Flagstar did not include around $4 billion of Signature Bank’s digital assets deposits.

These deposits are the ones that clients must transfer to another bank before the date given to them. Or else, the customers can wait to receive checks for the deposits in the mail address on their records.

These deposits remain with the FDIC receivership and Signet, the Signature bank’s payment network built for crypto payments.

Dispossession Wasn’t Needed

At a certain period, there were rumors that any organization intending to purchase Signature bank must accept to divest from the cryptocurrency sector.

Signature bank and Silvergate supplied most of the infrastructure for the cryptocurrency business and, in reality, weren’t forced to divest from the crypto industry.

Dispossession wasn’t needed says the FDIC spokesperson although the regulators notified possible clients about the risks facing their crypto assets.

This account closure notice seems to have dashed every hope of getting an alternative arrangement and still be in business with Signature bank. It also shows the risks of engaging in crypto investments.

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