FDIC Seeks Buyer for Signature’s Signet Crypto Platform

Signature Bank, FDIC

Federal regulators want to sell Signet, the failed Signature Bank’s real-time cryptocurrency payment network.

A Federal Deposit Insurance Corp. (FDIC) spokesperson told PYMNTS Wednesday (March 29) that the agency wants crypto depositors at Signature to close their accounts and move their funds by April 5.

“If the customers with deposits not assumed by Flagstar have not moved their money by then, the FDIC will mail a check to their address of record,” the spokesperson said.

Flagstar is the bank — owned by New York Community Bancorp — that bought Signature from the FDIC earlier this month.

The FDIC — which, as PYMNTS notes, has been in the headlines a lot lately — took over Signature Bank March 12 following a run on its deposits, part of a larger crisis involving regional banks that continues to shake the financial world.

Left out of that sale was about $4 billion in digital assets, as well as Signet, an important platform for the crypto sector.

As PYMNTS has written, Signet is a proprietary payment network that lets commercial crypto clients make real-time payments (RTP) 24 hours a day, seven days a week.

After the voluntary liquidation of Silvergate — another bank that operated in the crypto world — earlier this month, Signet was the only place many companies had to quickly send payments to exchanges, vendors or handle administrative needs like making payroll.

“The essential de-banking of crypto from 24/7 RTP rails may leave the industry with little option but to look to other geographies and jurisdictions, according to sector observers,” PYMNTS observed earlier this month.

Although Signature had begun to distance itself from the digital asset sector after the downfall of FTX last fall, it still held sizable deposits from some of the industry’s biggest players.

Meanwhile, other banks have begun to welcome crypto players following the recent banking crisis, according to news reports this week.

“There are dozens of other banks, both onshore and offshore, that are taking advantage of this opportunity,” Rich Rosenblum, president and co-founder of crypto trading platform GSR, told The Wall Street Journal Monday (March 27).

Banks willing to work with crypto firms have been flooded with applications over the past two weeks, the report said, citing comments from crypto executives and bankers.