On March 12, the Federal Reserve closed Signature Bank, a crypto-focused bank in the United States. The closure was prompted by concerns about the systemic risks posed by the bank, marking yet another bank to go down in the US.
According to a press release issued by regulators, the Federal Deposit Insurance Corporation (FDIC) will make all depositors of the bank whole.
The closure is aimed at protecting the country’s economy, with the authorities taking decisive actions to strengthen public confidence in the banking system.
The closure of Signature Bank has sparked fear in many countries, with discussions ongoing about the potential impact of the closure, particularly on the tech startup scene. However, regulators appear confident that measures taken following the 2008 recession are enough to prevent a large-scale crisis.
Signature Bank is one of the biggest crypto banks in the US, behind another major crypto-associated bank that is in turmoil – Silvergate. The markets have responded in kind, seeing red before clawing back some growth over the year.
The discussions surrounding Silicon Valley Bank and Silvergate have dominated headlines recently. Analysts have paid attention to what U.S. Treasury Secretary Janet Yellen has said, with the latter confirming that Silicon Valley Bank wouldn’t receive a bailout. The focus is on protecting depositors.
