- They also close the problematic Signature
- And they promise to take measures to protect the banking sector
- Markets reacted very positively to this news.
The US financial authorities (DOJ, FDIC and Fed) issued a joint press release. There declared a few important things.
- All deposits of bankrupt Silicon Valley Bank and Signature Bank will be protected by the state. Yesterday there were many doubts about this. By law, only insured deposits are eligible for compensation (and most private deposits are not insured).
- Banking regulators are shutting down New York-based Signature Bank, one of the largest lenders in the crypto industry, due to systemic bankruptcy risks.
- “All contributors [Signature Bank] will be saved. As in the case of the Silicon Valley Bank solution, the taxpayer does not bear any losses, ”the document says.
- The US is also introducing additional support measures for the banking sector.
Recall that Silicon Valley Bank last Friday declared itself bankrupt. It was the biggest collapse of an American bank since the fall of Lehman Brothers and Washington Mutual in 2008.
As for Signature Bank, it is insured by the FDIC (Federal Deposit Insurance Corporation). The company is a major lender to the crypto sector with total assets of around $110 billion and total deposits of over $88 billion.
In the morning, the markets reacted well to the news from the US: bitcoin rose by almost 9%.
