Banking

Regulators take control of Signature Bank

Published

2 weeks ago

March 13, 2023

Andjela Radmilac

Regulators take control of Signature Bank Andjela Radmilac · 1 hour ago · 2 min read

The FDIC closed Signature Bank on Sunday and now controls its $110 billion in assets and over $82 billion in deposits.

2 min read

Updated: March 13, 2023 at 7:17 am

Cover art/illustration via CryptoSlate

Signature Bank — a New York-based lender focused on servicing companies in the crypto industry — has shut down. The New York State Department of Financial Services closed the bank on Sunday, appointing the FDIC as a receiver.

U.S. President Joe Biden said that Treasury Secretary Janet Yellen and Economic Council Director Brian Deese worked with regulators to address problems both at SVB and Signature Bank “at his direction.”

“I’m pleased they reached a solution that protects workers, small businesses, taxpayers, and our financial system,” Biden tweeted on Sunday. “I’m firmly committed to holding those responsible for this mess fully accountable and to continuing our efforts to strengthen oversight and regulation of larger banks so that we are not in this position again.”

Signature is the second major bank to fail in two days, following the closing of Silicon Valley Bank on March 10.

Just like with Silicon Valley Bank, FDIC transferred all of Signature’s deposits and assets to the new full-service bank it created, Signature Bridge Bank. Activities in the bank’s 40 branches across the U.S. will resume on March 13 — including online banking.

The FDIC noted that all customers will continue to have uninterrupted access to their funds.

“The transfer of all the deposits was completed under the systemic risk exception approved earlier today. All depositors of the institution will be made whole. No losses will be borne by the taxpayers. Shareholders and certain unsecured debt holders will not be protected. Senior management has also been removed. Any losses to the Deposit Insurance Fund (DIF) to support uninsured depositors will be recovered by a special assessment on banks, as required by law,” the FDIC said in the announcement.

The actions are set to protect depositors and preserve the value of the bank’s assets while the FDIC looks for potential bidders.

Signature’s stock price shed almost 40% of its value since the beginning of the year after peaking in early 2022. In the past several months, the bank signed on several large clients that left Silvergate — including LedgerX and Coinbase.

Coinbase said it had around $240 million in corporate cash balance at Signature, which it expects to recover fully.

Related Topics:Banking FDIC Signaure Bank SVB

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Banking

Former Coinbase CTO urges ‘get to Bitcoin’ before CBDC digital lockdown

Published

1 day ago

March 22, 2023

Samuel Wan

Former Coinbase CTO urges ‘get to Bitcoin’ before CBDC digital lockdown Samuel Wan · 2 hours ago · 2 min read

Balaji Srinivasan warns of impending financial tyranny under CBDC system, advocates for Bitcoin as a solution.

2 min read

Updated: March 22, 2023 at 3:18 pm

Cover art/illustration via CryptoSlate

Former Coinbase CTO Balaji Srinivasan warned people to “GET TO BITCOIN BEFORE DIGITAL LOCKDOWN.”

The comment came in a lengthy tweet about banking system weaknesses and the soon-to-be-released FedNow payment network.

Srinivasan described a hypothetical situation where individuals have “Bitcoin independence” or are confined to a CBDC system. He compared the latter to a digital financial ringfence, which he labeled the “Great Dollarwall” — a nod to China’s Great Firewall that restricts access to certain websites considered inappropriate by the governing Chinese Communist Party.

“Fed is launching their CBDC in July.
You have about 90 days to exit.
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After that, you’re trapped.”

Fed around and find out

Recent events — including the collapse and seizure of three American banks — have drawn attention to the fragility of the banking system. This unease was further amplified over the weekend as Credit Suisse revealed a “material weakness.”

During a recent live stream, Input Output CEO Charles Hoskinson summarized the current state of the banking system, stating that its failure is inevitable. Hoskinson pointed out the unsustainability of Ponzinomics, which involves creating money out of thin air and relying on monetary expansion to sustain the Ponzi scheme.

On March 15, the Fed said its FedNow payment network would launch in July. This network will offer settlement services, allowing participating organizations to make instant payments to one another.

It is worth noting that FedNow is not a CBDC system. Nonetheless, some individuals suggest it could be a complement or precursor to a CBDC, should such a thing become a reality.

Connecting the two issues, Srinivasan launched into a lengthy tirade, criticizing the U.S. government’s history of dishonesty. For those who remain skeptical of his assertions, Srinivasan challenged them to “fed around and find out.”

Bitcoin to the rescue?

CBDC critics voice concerns over the centralization of power and their potential to force behavioral compliance. Srinivasan echoed these concerns saying:

“Just imagine wage, price, and capital controls down to the individual level for those still trapped in the dollar system.“

Under such a system, he warned it’s “game over” for personal sovereignty and those who oppose and call out political shenanigans. Addressing the argument that “something like this couldn’t happen in the West,” Srinivasan proceeded to reel off several examples of U.S. government lies.

“Just think about all the lies — NSA surveillance, Iraq WMD, the 2008 financial crisis, the last ten years of media whoppers, the claim that masks don’t work before they do, the denial of inflation“

With that, he asked if readers had enough trust in the U.S. government to relinquish complete control of their money to them.

For those who don’t, Srinivasan said financial sovereignty is possible through Bitcoin – recommending concerned citizens acquire BTC “before they lock you in.”

Bailout

First Republic Bank’s Shares Downgraded To Junk Status By S&P Global; Stock Slides More Than 25% Lower

Published

3 days ago

March 20, 2023

Jamie Redman

First Republic Bank’s Shares Downgraded To Junk Status By S&P Global; Stock Slides More Than 25% Lower

After UBS acquired Credit Suisse and close to a dozen financial institutions injected $30 billion into First Republic Bank four days ago, S&P Global downgraded First Republic’s shares to junk status on Sunday. Investors are concerned that the cash infusion from 11 major financial institutions may not address the bank’s liquidity issues. First Republic’s shares fell more than 15% on Monday morning when Wall Street opened and by 1:15 p.m. (ET), the stock was down more than 25%.

First Republic Bank Shares Slide 25% Lower Despite $30B Cash Infusion From 11 Lenders Last Week

At around 1:15 p.m. Eastern Time on Monday, March 20, 2023, shares of San Francisco-based First Republic Bank (NYSE: FRC) were down more than 25% against the U.S. dollar. The commercial bank and wealth management services provider recently received $30 billion from 11 major banks, including Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, Wells Fargo, BNY Mellon, PNC Bank, State Street, Truist Bank, and US Bank, on March 16.

However, the cash infusion has not helped First Republic as S&P Global reduced the bank’s stock (FRC) to junk status, citing concerns that the recent help from 11 banks may not alleviate First Republic’s problems. This was the second downgrade of FRC in less than a week. First Republic has attempted to raise capital by issuing more shares and seeking investment from private equity firms and smaller banks.

This is First Republic’s second attempt to raise capital since March 10, and then it received the deposit injection from the major lenders six days later. CNN contributor Allison Morrow was told that First Republic is facing a fate similar to that of Silicon Valley Bank (SVB) due to being a “Bay Area-based lender with a deep-pocketed client base.” Patricia McCoy, a law professor at Boston College, told Morrow that depositors are “particularly trigger-prone.”

“They’re sophisticated, they know they have other options, and they have mechanisms in place to move money quickly,” McCoy added.

At 1:15 p.m. (ET) on March 20, 2023, First Republic’s shares are down more than 25% this afternoon and trading for just above $17 per share. The bank’s shares reached an all-time intraday low while other banks managed to weather the storm on Monday following the Credit Suisse buyout.

Tags in this story

Bailout, Bailouts, Bank of America, Banking, Banking Bailouts, Banking Industry, banks, BNY Mellon, capital one financial, Cash Injection, CitiGroup, CNB Financial, credit suisse, deposit outflows, Discover Financial, Downgrade, FDIC, Federal Reserve, Financial Institutions, First Republic, First Republic Bank, First Republic Bank downgrade, First Republic Shares, FRC shares, FRC stock, Goldman Sachs, jpmorgan, Junk Status, Liquidity, morgan stanley, S&P 500, Signature Bank, Silicon Valley Bank, Silvergate Bank, state street, stimulus, Treasury, Truist Bank, Uninsured Deposits, US Bank, US Central Bank

What do you think about S&P Global downgrading First Republic Bank’s stock to junk status on Sunday? Share your thoughts about this subject in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

Image Credits: Shutterstock, Pixabay, Wiki Commons, Sundry Photography / Shutterstock.com

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Bank

Blockchain To Become More Relevant In Payments This Year, Sberbank Exec Says

Published

3 days ago

March 20, 2023

Lubomir Tassev

Blockchain To Become More Relevant In Payments This Year, Sberbank Exec Says

Blockchain technology can help solve current issues with settlements, according to the deputy chief executive of Sberbank. Russia’s largest bank is working with other financial institutions to develop blockchain-based payment applications, the banker revealed.

Sberbank Sees Solution to Russia’s Troubles With Settlements in Blockchain

With major Russian banks disconnected from the main global interbank payment system, SWIFT, due to Moscow’s war on Ukraine, blockchain will help to solve the problem with payments, Sberbank’s First Deputy CEO Alexander Vedyakhin is convinced.

“It is blockchain technology that will make it possible to solve this issue because this is a distributed ledger, there is no one point of decision making, no center, no knife switch that can be shut off,” Vedyakhin explained, quoted by the Interfax news agency.

“Everyone has everything recorded, there are special protocols that make it possible to do this confidentially,” the executive added during a meeting of the Budget and Financial Markets Committee of the Federation Council, the upper house of Russian parliament.

Majority state-owned Sberbank, which is Russia’s largest bank by assets, is currently conducting research on the applications of blockchain technology together with other banking institutions and the Central Bank of Russia. Vedyakhin, who believes that blockchain will become even more relevant in 2023, emphasized:

The next generation payment systems are blockchain.

Issues With Speed and Privacy Overcome in Latest Protocols, Vedyakhin Says

The banker also noted that the crypto-related technology has developed over the past few years and highlighted some of the outstanding issues that had to be resolved. These include the capacity of blockchain platforms and the confidentiality of transactions.

“The first was speed. What we were seeing before did not allow us to process a large number of transactions. Now we believe this problem has been generally solved. The second was confidentiality… If we have a transaction, and another 10 million people see it, you are unlikely to want to make it. Now this problem has also been solved in the new protocols,” Alexander Vedyakhin elaborated.

A number of Russian banks, including Sberbank, were targeted with sanctions imposed by the U.S. and the EU after the invasion of Ukraine in late February, 2022. The financial restrictions severely limited Russia’s access to the global financial system.

Last June, the CEO of Sberbank Herman Gref said that the bank has started working on establishing an international settlements system, alternative to SWIFT, planning to complete it within a year. Russia’s manufacturing and technology conglomerate Rostec announced a blockchain-based platform with the similar purpose the same month. Legalizing crypto payments for cross-border settlements has been considered as an option, too.

Tags in this story

Bank, Banking, banks, Blockchain, blockchain technology, ceo, Crypto, crypto payments, Cryptocurrencies, Cryptocurrency, deputy, DIstributed Ledger, Executive, Payments, restrictions, Russia, russian, Sanctions, Sberbank, Settlements, Swift

Do you think Russia will try to employ blockchain technology and cryptocurrencies to circumvent sanctions? Share your thoughts on the subject in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

Image Credits: Shutterstock, Pixabay, Wiki Commons, E. O. / Shutterstock.com