Flagstar Acquires Some Of Signature Bank’s Assets, Leaves Out All Crypto Assets

FDIC Signature bank — Editorial credit PoetraRH Shutterstockcom

Flagstar Bank, a subsidiary of NYCB, Inc, has agreed to acquire most of Signature Bank’s business operations and assets, excluding those about cryptocurrency. The US FDIC had placed Signature Bank in receivership after an unsuccessful attempt to find Signature Bank a buyer.

Flagstar Bank Was Not Forced To Leave Out Crypto – FDIC

Unnamed sources previously reported that any intending buyer of Signature Bank would be required to divert from its cryptocurrency assets by the FDIC. However, the FDIC has clarified that it only warned intending buyers of risks associated with cryptocurrency without making it a requirement to any intending buyer of the bank.

Flagstar Bank, which will acquire almost every asset of Signature Bank, has voluntarily decided to remove customers with crypto-related accounts. Consequently, the FDIC will continue retaining almost every asset of the Signature Bank, including a loan of roughly $60 billion that will be dealt with later by the FDIC.

The deal includes buying Signature bank’s assets worth approximately $38.5b, including about $13b in loans bought at a discount of $2.75b. As part of the agreement, the FDIC will receive equity appreciation rights through a common stock worth approximately $300 million in the parent company of Flagstar.

Previously the Signature Bank held approximately $89b worth of deposits and assets worth $110b.

Flagstar Refuses To Purchase Signature Bank’s Crypto Payment System Signet

Flagstar Bank’s decision to exclude cryptocurrency-related assets from Signature Bank’s assets following its purchase has been confirmed. This Flagstar decision means that Signet, a payment network for cryptocurrency customers owned by Signature Bank, will remain under FDIC’s receivership.

Additionally, Signet’s sale and the deposits and assets of Signature Bank may likely hold later. While Signet appears to be in operation, its future is uncertain.

Circle, for its part, has already switched its crypto banking operations from Signet to BNY Mellon. Flagstar Bank has purchased only a fraction of assets and deposits at Signature Bank, with the FDIC retaining its power over a vast percentage.

However, as part of the agreement, the FDIC will receive equity appreciation rights via common stock in the parent company of Flagstar.

Although Signature Bank has reopened its 40 branches and daily banking operations have resumed as usual, Flagstar Bank will communicate with customers if there would be changes.