New York community The Bancorp the pursuit of a deal to acquire failed Signature Bankaccording to people familiar with the matter.
The Federal Deposit Insurance Corp. may announce. A deal for Signature could be reached as soon as this week, said the people, who asked not to be identified because the matter is not public. No final decision has been made and discussions may collapse. Representatives of NYCB and the FDIC did not immediately respond to messages seeking comment.
US prosecutors were investigating New York-based Signature Bank’s work with crypto clients before regulators lost faith in the management and ran this month on arrested the lender, with greater Silicon Valley Bank. The failures of the two companies as well as the collapse days earlier of Silvergate Capital Corp., another crypto-friendly lender, have raised concerns about spillover effects to other lenders in the region and in the wider economy.
Like Silicon Valley Bank, whose clients are almost all businesses, Signature has a deposit base that is mostly unsecured. That may have attracted the attention of regulators looking at the stability of banks with large unsecured deposit bases.
The FDIC said this transferred all of Signature Bank’s deposits and substantially all of the company’s assets in Signature Bridge Bank NA, a full-service bank that the FDIC will oversee as it markets the company to potential bidders.
Financial watchdogs and Justice Department officials have repeatedly warned that companies handling crypto or related currencies must be vigilant in identifying customers and ensuring that cash flows for legitimate purposes. Banks in particular are obligated to flag suspicious transactions to federal authorities.
Silvergate is being investigated by the Department of Justice over dealings with the defunct FTX exchange by Sam Bankman-Fried and Alameda Research, Bloomberg reported. Federal prosecutors and the US Securities and Exchange Commission are also investigating the collapse of Silicon Valley Bank, including whether stock sales by executives violated trading rules.
The firm did not disclose the questions in its latest regulatory filings.
After FTX’s November implosion, Signature executives said they intend to shed as much as $10 billion in deposits from digital-asset clients, which at the time represented more than a fifth of its deposit base. But they still plan to keep some.
–With help from Gillian Tan, Jenny Surane, Max Reyes, Hannah Levitt and Sridhar Natarajan.