Signature Bank’s Crypto Clients Required to Close Accounts by April 5

    Signature Bank, a New York-based bank with a focus on blockchain and cryptocurrency, has reportedly given its crypto clients until April 5 to transfer their funds to another bank or risk having their accounts closed by the federal regulator. The move follows the bank’s sale of $1.9 billion of its crypto deposits to New York Community Bancorp (NYCB), which excluded deposits belonging to digital asset clients. As a result, the United States Federal Deposit Insurance Corporation has been reaching out to Signature’s depositors, urging them to transfer their funds out before April 5, after which any remaining crypto deposits will be liquidated, and a check will be mailed to the client’s address.

    Signature’s payments platform Signet, which utilizes blockchain technology for real-time payments with no transaction fees or limits, was also excluded from the sale, and its fate is currently uncertain.

    This move by Signature Bank underscores the ongoing regulatory challenges faced by banks and financial institutions that offer crypto-related services. Despite the growing mainstream adoption of cryptocurrency, many traditional financial institutions remain wary of the associated risks and regulatory uncertainties. This has led some banks to limit their exposure to crypto or exit the space altogether, while others, like Signature Bank, have embraced the potential of blockchain and crypto and are seeking to carve out a niche in the industry.

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