Flagstar Bank Acquires Signature Bank’s Assets and Branches, Excluding Cryptocurrency Operations

On Monday, about a week after Signature Bank’s failure, the FDIC announced that Flagstar Bank Flagstar assumed nearly all of Signature’s deposits, except for $4 billion in deposits related to the bank’s crypto banking business.

FDIC expects $2.5 billion loss from Signature Bank failure, extends bid window for Silicon Valley Bank

The FDICannouncedthat Flagstar Bank, a subsidiary of New York Community Bancorp, has acquired the assets and bank branches of Signature Bank, effective March 20, 2023. The branches will continue to operate under normal business hours. With the exception of depositors associated with the digital banking business, depositors of Signature Bank will automatically become depositors of Flagstar Bank.

We sincerely hope that you understand how Signature Bank was selectively stripped of its digital asset business before it was acquired.

– David Marcus (@davidmarcus) is March 20, 2023

Despite statements to the contrary from the FDIC, Flagstar acquired Signature Bank without acquiring the cryptocurrency business. Sources familiar with the sale had suggestedthat a divestiture of crypto activities was

necessary, but the FDIC insisted last week that it was not. The New York State Department of Financial Services also publicly stated prior to the FDIC announcement that Signature’s closure had nothing to do with cryptocurrencies. Former politician Barney Frank speculated that Signature’s closure was intended to convey an “anti-crypto” message.

The FDIC’s announcement on Monday sparked debate on social media, with some speculating that it proved a conspiracy theory, with Custodia Bank founder and CEO Caitlin Longtweetingabout the news, “They sure have crypto deposits locked out,” she tweeted. Time to investigate.” In addition to Flagstar’s failure to underwrite Signature Bank’s cryptocurrency deposits, the FDIC also noted that the government is expecting losses.

The FDIC estimates the cost of Signature Bank’s failure to the Deposit Insurance Fund to be approximately $2.5 billion.” The exact cost will be determined when the FDIC terminates the receivership.” Additionally, the FDICextended the bid windowfor Silicon Valley Bank (SVB) on Monday, with SVB’s private bank bid due March 22, 2023, and its bridge bank, Silicon Valley Bridge Bank, N.A., due two days later

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