(Republicaninformer.com)- Another domino fell after Signature Bank, a cryptocurrency lender in New York, was shut down by regulators, according to CNBC. In a joint statement, the Treasury Department, Federal Reserve, and Federal Deposit Insurance Corp. said that the bank posed another systemic risk.
Regulators have assured depositors that they will retain access to their money similarly compared with depositors at Silicon Valley Bank, which was shut down after a bank run was triggered by worried investors. A wave of customer withdrawals triggered a 60% nosedive in the bank’s stock, according to The New York Times. Regulators then took over and the FDIC was named its receiver, overseeing over $175 billion in customer deposits.
The collapse of SVB, a 40-year-old institution, is the second-largest crash since 2008. Those who are uninsured will receive an advanced dividend and perhaps additional dividends as the bank’s assets are sold in the coming weeks, according to CNBC.
Signature Bank, one of the largest banks in the cryptocurrency industry, was valued at $4.4 billion last week after a selloff resulted in a devaluation of 40%. A December 2022 securities filing indicates that the bank had $110.4 billion in total assets and $88.6 billion in total deposits.
Silvergate also announced its liquidation last week, meaning three of the country’s largest banks have fallen this year. The bank’s stock plummeted 36% in after-hours trading, prompting the bank to reconsider its future.
“In light of recent industry and regulatory developments, Silvergate believes that an orderly wind-down of Bank operations and a voluntary liquidation of the Bank is the best path forward,” the company said in a statement.
The crypto space has been turbulent in recent months. After the collapse of the industry’s largest exchange, FTX, $200 billion was erased from the market. Many investors were uninsured, meaning they could only write them off as losses, according to American Pigeon.