Tag: Signature Bank

Signature Bank Team Joins Customers Bank, Part of $21B Customers Bancorp

by Blockchain News

Customers Bank, a subsidiary of Customers Bancorp (NYSE:CUBI), has announced the successful onboarding of nearly 30 team members formerly employed by Signature Bank, once known for its crypto-friendly stance. This move follows the closure of Signature Bank by its state chartering authority, as announced in a joint statement by the Treasury, Federal Reserve, and FDIC on March 12, 2023.

The team, which retains its experienced leadership, will initially manage the transfer and servicing of about 150 loans in Customers Bank’s recently acquired $631 million venture banking loan portfolio. The bank expects this team to attract significant deposits from these clients, contributing to the growth of Customers Bank’s Tech & Venture and Fund Finance lines of business.

As part of the onboarding process, Customers Bancorp is awarding each team member with restricted stock units. The aggregate award amounts to up to 23,464 restricted stock units, with a fair value equivalent to the closing price of Customers Bancorp’s common stock as of market close on the business day immediately preceding the grant ($32.88). These awards, which will vest equally over three years provided the individual remains employed through the vesting date, are being made outside of the Customers Bancorp 2019 Stock Incentive Plan as one-time employment inducement awards.

Customers Bank is recognized as one of the nation’s top-performing banking companies, with over $21 billion in assets, making it one of the 100 largest bank holding companies in the US. The bank is known for its innovative approach to banking, offering a blockchain-based 24/7/365 digital payment solution among its services.

Image source: Shutterstock

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Signature Bank Collapse Blamed on Poor Management

by Blockchain News

Signature Bank’s Collapse Blamed on Poor Management and Inadequate Risk Management Practices

Signature Bank, a New York-based bank that catered to corporate and high-net-worth clients, collapsed on March 12, 2023. In the wake of the bank’s collapse, the United States Federal Deposit Insurance Corporation (FDIC) conducted a post-mortem assessment to determine the cause of the bank’s failure. The FDIC’s assessment revealed that poor management and inadequate risk management practices were the root causes of Signature Bank’s collapse.

According to the FDIC, Signature Bank’s senior management failed to adequately monitor and control the bank’s risk exposures, which ultimately led to the bank’s downfall. The FDIC also noted that the bank’s board of directors did not provide effective oversight of management’s actions, further contributing to the bank’s collapse.

The FDIC’s assessment of Signature Bank’s risk management practices revealed several shortcomings. For example, the bank did not have adequate controls in place to manage its credit risk exposures. Additionally, the bank’s risk management systems and processes were not integrated, making it difficult to obtain a comprehensive view of the bank’s risk exposures.

In addition to the bank’s poor risk management practices, the FDIC’s assessment also identified deficiencies in Signature Bank’s operations and internal controls. For example, the bank did not have adequate procedures in place for verifying customer identities and detecting potential money laundering activities.

The FDIC’s assessment of Signature Bank’s collapse underscores the importance of effective risk management practices in the banking industry. Banks must have robust risk management systems and processes in place to identify, measure, monitor, and control their risk exposures. Additionally, senior management and board members must be actively engaged in overseeing the bank’s risk management activities.

In response to Signature Bank’s collapse, the FDIC has taken steps to strengthen its oversight of the banking industry. The FDIC has increased its examination frequency for banks that pose a higher risk to the insurance fund. Additionally, the FDIC has enhanced its risk management guidance for banks to promote better risk management practices.

In conclusion, the collapse of Signature Bank serves as a cautionary tale for the banking industry. Banks must prioritize effective risk management practices to prevent similar failures in the future. Furthermore, regulators and industry participants must work together to promote a strong and resilient banking system that can withstand economic shocks and protect the interests of depositors and the broader economy.

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US Bank Failures Shock Regulators

by Blockchain News

Regulators in the United States have been prompted to re-evaluate their supervision after the high-profile failures of Signature Bank, Silicon Valley Bank (SVB), and Silvergate Bank. The New York Department of Financial Services (NYDFS) and the US Federal Reserve Board have both published their internal reviews on the handling of the failures, which occurred in March.

SVB was closed by California regulators on March 10, and Signature Bank was moved against by the NYDFS on March 12. Silvergate Bank had announced its voluntary liquidation on March 8, setting off runs on the banks. The string of bank failures sent shockwaves through the financial industry, with U.S. President Joe Biden even feeling the need to tweet a response.

The Fed review of SVB’s failure found that the bank’s management failed to manage its risks, and supervisors “did not fully appreciate the extent of the vulnerabilities” of the bank as it “grew in size and complexity.” The report noted that “SVB’s foundational problems were widespread and well-known.”

The NYDFS review of Signature Bank’s failure highlighted areas where the regulator’s supervision could have been more effective. The report noted that the bank’s risk management and compliance programs were not adequate, and that the bank had a “lack of clarity” on its risk appetite.

The failures of these banks have prompted US regulators to re-evaluate their supervision of financial institutions. The NYDFS and the Fed have both acknowledged the need for improvements in their supervision and have pledged to take action to strengthen their oversight.

The failures have also raised concerns about the risks associated with banks that are friendly towards cryptocurrency. Both SVB and Silvergate Bank were known for their crypto-friendly policies, and some have speculated that their failures may be linked to their exposure to the volatile cryptocurrency market.

Overall, the failures of Signature Bank, SVB, and Silvergate Bank have highlighted the need for stronger regulatory oversight of financial institutions. While the NYDFS and the Fed have acknowledged the need for improvements in their supervision, it remains to be seen whether these improvements will be enough to prevent future bank failures.

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Blockchain Association Seeks Information on De-banking of Crypto Companies

by Blockchain News

The Blockchain Association, a cryptocurrency advocacy group, has filed additional Freedom of Information Law (FOIL) requests to regulators in the US. The group had initially filed for information from the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, and the Office of the Comptroller of the Currency. The new requests were submitted to the Federal Housing Finance Agency and the New York Department of Financial Services, seeking further information on the de-banking of crypto-friendly banks.

The organization is interested in learning more about the de-banking of cryptocurrency companies after the closure of Signature Bank and the failure of Silvergate Bank. These two banks were known for their friendly stance towards cryptocurrency-related businesses, but both were closed down, leaving many companies in the crypto industry without a banking partner.

The Blockchain Association believes that these closures were a result of regulatory pressure, and that the lack of transparency around the issue is problematic for the industry. By filing these FOIL requests, the group hopes to shed more light on the situation and ensure that the regulatory process is fair and transparent.

The de-banking of crypto companies has been a contentious issue for some time. Many banks are hesitant to work with companies in the industry due to concerns around money laundering and other illegal activities. However, for companies in the crypto space, having a banking partner is essential for conducting day-to-day business operations.

The closure of Signature Bank and Silvergate Bank has highlighted the fragility of the relationship between banks and cryptocurrency companies. The Blockchain Association is seeking to understand what led to the closures and whether there was any unfair regulatory pressure involved.

This is not the first time that the Blockchain Association has filed FOIL requests to obtain information about the regulation of cryptocurrency-related businesses. The group has been a vocal advocate for the industry and has worked to ensure that regulators take a fair and balanced approach to the sector.

As the crypto industry continues to grow, it is likely that we will see more regulation and scrutiny from regulators. The actions of the Blockchain Association demonstrate the importance of transparency and accountability in this process, and highlight the challenges faced by companies operating in this space. By working together with regulators, the industry can ensure that it continues to thrive and innovate, while also addressing legitimate concerns around security and illegal activity.

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Australian Bankers Association cost of living probe shows bank pressure

by Blockchain News

The Australian Banking Association (ABA), which is the trade association for the Australian banking industry, has initiated a cost of living inquiry in order to investigate the impact that the COVID-19 pandemic, global supply chain constraints, geopolitical tensions, and other factors have had on the people of Australia. The purpose of this investigation is to determine how these and other factors have affected the cost of living in Australia. The primary purpose of this inquiry is to determine the degree to which these and other factors, in addition to Australia’s already high cost of living, have contributed to that level of expense.

The recent analysis of the rising inflation and concurrent collapse of three major traditional banks — Silicon Valley Bank (SVB), Silvergate Bank and Signature Bank — proved that more than 186 banks in the United States are at risk of a similar shutdown if depositors decide to withdraw all of their funds. These banks were Silicon Valley Bank (SVB), Silvergate Bank and Signature Bank. Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank were the names of these financial institutions. These particular banking establishments went under the names Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank respectively. These specific financial institutions were known by the names Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank, respectively, at one point in time. At one point in time, these particular financial institutions were known by the names Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank, respectively. The Australian Bar Association (ABA) is currently in the process of conducting an investigation with the intention of determining both the response of the fiscal policies of the Australian government as well as the means by which the cost of living in Australia may be lowered. The goal of the investigation is to determine both the response of the fiscal policies of the Australian government as well as the means by which the cost of living in Australia may be lowered. Both the reaction of the Australian government’s fiscal policies and the ways by which the cost of living in Australia may be lowered are the foci of the inquiry, the objective of which is to discover which of these may be determined. The aim of the study is to determine both of these things at the same time as part of its objective.

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Federal Regulators Testify on Bank Failures

by Blockchain News

Representatives from the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve will provide testimony about the failure of two major banks, Silicon Valley Bank and Signature Bank, at an upcoming hearing that has just been announced by the United States House Financial Services Commission. Legislators are attempting to comprehend the factors that contributed to the failure of these institutions. The hearing is set to take place on March 29, and it will contain evidence from the head of the FDIC as well as the vice chair of supervision for the Fed.

The Silicon Valley Bank was forced to close its doors on March 10 as a result of a run on the bank by its large depositors. The majority of uninsured depositors who had more over $250,000 were covered by the government once they stepped in. On the other hand, it was claimed that Signature Bank did not have any problems with its solvency at the time of its closure on March 12. The FDIC was nonetheless given responsibility of the firm’s insurance procedure by New York’s regulatory authorities.

A report on the supervision and regulation of Silicon Valley Bank by the Federal Reserve is going to be published soon by Michael Barr of the Federal Reserve. According to recent reports, the Department of Justice and the Securities and Exchange Commission have both opened investigations into allegations that some officials at the bank sold shares in the weeks running up to the institution’s shutdown.

Some MPs have indicated that exposure to crypto businesses may have played a part in the failure of the banks, while supporters in the industry have maintained that government officials were attempting to “de-bank” crypto and blockchain enterprises. The House Committee on Financial Services has indicated that it plans to conduct additional hearings about this matter.

It is important to note that Silicon Valley Bank is not connected in any way to Silicon Valley Bank Group, also known as SVB Financial Group. SVB Financial Group is a publicly listed firm that specializes in providing financial services to enterprises in the technology and life science industries. On the other hand, Signature Bank is a commercial bank that provides an extensive range of services and is principally active in the state of New York.

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Signature Bank Under Investigation by US Government Bodies

by Blockchain News

Signature Bank, a cryptocurrency-friendly bank, is reportedly under investigation by two United States government bodies over concerns that it did not take adequate measures to detect potential money laundering by its clients. According to a Bloomberg report on March 15, investigators with the Justice Department were examining whether Signature was taking preemptive measures to monitor transactions for “signs of criminality” and properly vetting account holders. A separate probe by the Securities and Exchange Commission was also “taking a look” at the bank, although details regarding the nature of the SEC’s probe were not reported.

The investigations may have contributed to the recent decision by New York state regulators to close the bank, although it is unclear when the investigations began and what effect, if any, they had on the closure. Signature and its staff are not accused of wrongdoing, and the investigations may be finalized without any charges or further action taken by the SEC or the Department of Justice.

The report comes after a class action lawsuit was filed by Signature shareholders on March 14, alleging that the bank and former executives claimed to be “financially strong” just three days before it was forcibly shuttered. Barney Frank, a former board member of Signature Bank, has claimed that the regulators wanted “to send a very strong anti-crypto message” and that the bank became the “poster boy” for this message, despite there being “no insolvency based on the fundamentals.”

Signature Bank was closed on March 12 as part of a series of bank closures that also included Silvergate Capital and Silicon Valley Bank. The DOJ and the SEC have reportedly since initiated separate investigations into the collapse of Silvergate Capital and SVB. The regulators will examine the events leading up to the bank’s collapse, including scrutinizing security filings that disclosed the sale of SVB shares by the firm’s CEO Greg Becker and CFO Daniel Beck that took place two weeks prior to its downfall.

The SEC has not formally commented on the matters, but SEC chair Gary Gensler said on March 12 that it “will investigate and bring enforcement actions if we find violations of the federal securities laws.” The investigations into Signature Bank and other cryptocurrency-friendly banks highlight the increasing scrutiny of the cryptocurrency industry by regulatory bodies, particularly in the United States.

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Bitcoin’s Market Cap Surpasses Meta’s Despite Turbulent Week for Crypto

by Blockchain News

Bitcoin, the world’s most popular cryptocurrency, has managed to flip the market cap of tech giant Meta, despite a turbulent week for the crypto market following the downfall of Silicon Valley Bank (SVB) and Signature Bank. According to Companies Market Cap, Bitcoin’s market cap has reached $471.86 billion, surpassing Meta’s $469 billion.

Companies Market Cap provides real-time monitoring and ranking of market caps for cryptocurrencies, public companies, precious metals and exchange-traded funds. Only 24 hours earlier, BTC’s market cap was nearly $37 billion below Meta’s, sitting at $433.49 billion. However, Bitcoin’s market cap rose 9.7% in the past 24 hours, pushing the cryptocurrency to sit in the 11th spot among top assets by market cap, just below electric vehicle maker Tesla.

The crypto market has been experiencing a lot of turmoil lately, with the downfall of SVB and Signature Bank causing significant drops in the market. SVB, a key player in the cryptocurrency space, announced that it was shutting down all of its crypto-related accounts, while Signature Bank was sued by the New York Attorney General for allegedly facilitating money laundering for a cryptocurrency exchange.

Despite these setbacks, Bitcoin has managed to bounce back and surpass Meta’s market cap. The gap between the two market caps is now more than $20 billion, though it still is quite a distance from gold, which sits in first position with a $12.59 trillion market cap, followed by Apple in second place with a $2.380 trillion market cap.

Bitcoin’s price has risen 8.72% in the past 24 hours, sitting at $24,441. This price surge could be attributed to various factors, such as increased institutional adoption of Bitcoin and positive sentiment around the crypto market in general.

Bitcoin has been gaining popularity among investors and companies alike, with Tesla investing $1.5 billion in the cryptocurrency earlier this year. Other major companies, such as Square and MicroStrategy, have also invested heavily in Bitcoin as a hedge against inflation and a potential store of value.

Despite its popularity, Bitcoin still faces significant challenges, such as regulatory uncertainty and concerns around energy consumption. Many countries are still grappling with how to regulate cryptocurrencies, which could impact the market’s growth and adoption.

Additionally, Bitcoin’s energy consumption has been a topic of controversy, with some critics arguing that the amount of energy used to mine and transact the cryptocurrency is unsustainable and harmful to the environment. However, proponents of Bitcoin argue that its energy consumption is necessary to maintain the security and decentralization of the network.

In conclusion, Bitcoin’s market cap surpassing Meta’s despite the turbulent week for crypto is a positive sign for the cryptocurrency market. However, it still faces significant challenges that could impact its growth and adoption in the future.

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Overnight collapse of two traditional banks triggers chaos

by Blockchain News

On March 11, the financial world was rocked by the sudden collapse of two major traditional banks, Silicon Valley Bank and Signature Bank. This triggered a series of events that impacted millions of businesses, venture capitalists, and bottom-line investors alike. One of the most significant effects of this collapse was the depegging of several stablecoins, including USD Coin (USDC), USDD (USDD), and Dai (DAI), from the U.S. dollar. Circle, the company that issues USDC, announced that $3.3 billion of its $40 billion reserves were stuck in SVB, causing the depegging of the stablecoins.

This news sent shockwaves through the financial community, and many worried about the potential fallout from the collapse of these banks. However, United States President Joe Biden quickly stepped in to reassure taxpayers that they would not feel the burn. The federal government took swift action to protect depositors, ensuring that they would not lose their money as a result of the banks’ collapse.

Biden also made it clear that those responsible for the banks’ collapse would be held accountable. He vowed to investigate the matter thoroughly and take action against anyone found to be responsible. This announcement was welcomed by many in the financial community, who had feared that the collapse of these banks would go unpunished.

The collapse of Silicon Valley Bank and Signature Bank was a significant event in the financial world. These banks were both well-established institutions with many clients and significant assets. The sudden collapse of these banks had far-reaching consequences, and many businesses and individuals suffered losses as a result.

However, the fallout from this event was not limited to those directly impacted by the banks’ collapse. The depegging of stablecoins from the U.S. dollar caused significant disruption in the cryptocurrency market. Stablecoins are widely used as a way to move money quickly and cheaply between different exchanges and platforms. When stablecoins depegged from the U.S. dollar, this caused significant uncertainty and volatility in the cryptocurrency market.

Overall, the collapse of Silicon Valley Bank and Signature Bank was a wake-up call for the financial industry. It highlighted the importance of strong regulation and oversight to prevent such events from happening in the future. While the federal government’s swift action helped to mitigate the damage caused by the banks’ collapse, there is still much work to be done to ensure the stability and resilience of the financial system as a whole.

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Crypto Firms Report Funds Tied Up with Shuttered Signature Bank

by Blockchain News

On March 12, New York regulators and the United States Federal Deposit Insurance Corporation shut down Signature Bank, a crypto-friendly bank that had reportedly become a systemic risk to the US economy. As news of the shutdown spread, several crypto firms came forward to report that they had funds tied up with the bank.

Coinbase, one of the largest crypto exchanges in the world, announced via Twitter that it had around $240 million in corporate funds at Signature Bank that it expected to be fully recovered. Stablecoin issuer and crypto firm Paxos also reported that it had $250 million held at the bank, but noted that it held private insurance that covered the amount not covered by the standard FDIC insurance of $250,000 per depositor.

Celsius, a crypto lender that recently filed for bankruptcy, reported that Signature Bank had held some of its funds, but did not disclose the amount. However, the Celsius Official Committee of Unsecured Creditors, which represents the interests of account holders, added that “all depositors will be made whole.”

As news of the shutdown and related crypto exposure spread, other firms in the crypto industry came forward to quell fears about their related exposures. Robbie Ferguson, co-founder of Web3 game development platform Immutable X, and Mitch Liu, co-founder of the media-focused Theta Network blockchain, both separately tweeted that their respective companies had no exposure to Signature.

Crypto.com also reported in a tweet by CEO Kris Marszalek that it had no funds in the bank. Similarly, Paolo Ardoino, the chief technology officer of stablecoin firm Tether, tweeted that Tether had no exposure to Signature Bank.

While some firms expect to recover their funds in full, the closure of Signature Bank has raised concerns about the risks associated with the crypto industry. In addition to the shutdown of Signature Bank, the Federal Reserve announced that the FDIC had been approved to take actions to protect depositors at Silicon Valley Bank, a tech-startup-focused bank that had experienced liquidity issues due to a bank run that spread contagion to the crypto sector. The Fed also announced a $25 billion program to ensure ample liquidity for banks to cover the needs of their customers during times of turbulence.

Overall, the closure of Signature Bank highlights the challenges and risks associated with the rapidly growing and often unpredictable crypto industry. While some firms may be able to recover their funds, others may face significant losses, underscoring the need for greater regulatory oversight and risk management in the sector.

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