On Monday, about a week after the collapse of Signature Bank, the Federal Deposit Insurance Corporation (FDIC) announced that Flagstar Bank, a wholly owned subsidiary of New York Community Bancorp, acquired 40 former branches of Signature and its assets. Flagstar assumed nearly all of Signature’s deposits, except for $4 billion of deposits related to the bank’s crypto banking business.

FDIC Expects $2.5 Billion Loss from Signature Bank Failure, Extends Bid Window for Silicon Valley Bank

The FDIC has announced that Flagstar Bank, a subsidiary of New York Community Bancorp, has acquired the assets and bank branches of Signature Bank as of March 20, 2023. The branches will continue to operate during regular business hours. With the exception of depositors related to the digital banking business, depositors of Signature Bank will automatically become depositors of Flagstar Bank.

I really hope we will understand how Signature Bank was selectively stripped of its digital assets business before being acquired.

— David Marcus (@davidmarcus) March 20, 2023

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Despite statements from the FDIC to the contrary, Flagstar purchased Signature Bank without acquiring its cryptocurrency operations. Sources familiar with the sale had suggested that divestment of crypto activities was required, but the FDIC insisted last week that it would not be necessary. The New York State Department of Financial Services also stated publicly that Signature’s shutdown was unrelated to cryptocurrency, prior to the FDIC’s announcement. Former politician Barney Frank speculated that the closure of Signature was intended to convey an “anti-crypto” message.

The FDIC’s press release on Monday stated that Flagstar Bank will not assume any of Signature Bank’s cryptocurrency depositors or clients. “Flagstar Bank’s bid did not include approximately $4 billion of deposits related to the former Signature Bank’s digital banking business,” the FDIC announced. The agency also said that it will provide the deposits directly to customers associated with the digital banking business.

The FDIC’s announcement on Monday sparked a discussion on social media, with some speculating that a conspiracy theory had been proven true. Caitlin Long, founder and CEO of Custodia Bank, tweeted about the news: “They indeed kept out the crypto deposits. Investigation time.” In addition to Flagstar not assuming Signature Bank’s cryptocurrency deposits, the FDIC also noted that the government anticipates losses.

The FDIC estimated the cost of Signature Bank’s failure to its Deposit Insurance Fund to be around $2.5 billion, according to the agency’s announcement. “The exact cost will be determined when the FDIC terminates the receivership.” In addition, the FDIC extended the bid window for Silicon Valley Bank (SVB) on Monday. Bids for SVB’s private bank are due on March 22, 2023, and bids for the bridge bank, Silicon Valley Bridge Bank, N.A., will be due two days later.

What are your thoughts on the FDIC’s decision not to include Signature Bank’s cryptocurrency deposits in the acquisition by Flagstar Bank? Share your opinion in the comments section below.

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With the crypto economy experiencing significant gains over the past week and the price of ethereum rising 11.9%, the market capitalization of Lido’s staked ether has increased to $10.3 billion. This recent increase has propelled the token’s overall market valuation to the ninth-largest position, according to the crypto market capitalization aggregation website coingecko.com.

Lido Finance’s TVL Dominates Defi with a 21.59% Share

The value of liquid staking tokens associated with ethereum (ETH) has increased significantly over the last week following ether’s 11.9% gains against the U.S. dollar. In particular, Lido’s staked ethereum token, STETH, now has a market capitalization above the $10 billion range, reaching $10.36 billion on Monday, March 20, 2023. According to coingecko statistics, STETH’s market valuation now ranks ninth, with dogecoin’s (DOGE) market capitalization holding the tenth position.

Above STETH is the market valuation of polygon (MATIC) at $10.42 billion. Currently, there is a circulating supply of around 5.8 million STETH, and over the past 24 hours, the token has recorded $22.35 million in global trades. The most active exchanges dealing with STETH on Monday are Bybit, Gate.io, and Huobi. STETH has gained 12.4% this week and 4.6% over the past 30 days.

Currently, Lido Finance’s website estimates that STETH stakers are receiving around a 5.9% annual percentage rate (APR) by staking the token. At the time of writing, Lido is the largest decentralized finance (defi) protocol out of the $49.01 billion total value locked (TVL) on Monday. Lido’s TVL accounts for 21.59% of the entire amount of value locked in defi. In the last seven days, defillama.com statistics show that Lido’s TVL has increased by 8.9%, and over 30 days, it has grown by 17.07%.

Defillama.com explains that on Monday, 7.83 million ETH worth $13.98 billion is staked in liquid staking protocols today. Lido’s STETH represents 74.51% of the aggregate. Coinbase’s Wrapped Ether token protocol has $2.1 billion in total value locked, or 1.16 million Ethereum. It is the second-largest liquid staking project in terms of TVL.

While STETH is shown on coingecko.com as the ninth-largest coin by market cap, this is not the case with other crypto market aggregation sites like coinmarketcap.com. Because it’s a synthetic version of Ether, some crypto market aggregation sites do not include STETH in the top ten, despite its capitalization size.

What are your thoughts on the increasing market capitalization of STETH and its role in the growing liquid staking ecosystem? Do you think STETH will continue to climb up the rankings of the top cryptocurrencies? Share your thoughts about this subject in the comments section below.

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On Sunday, the New York Department of Financial Services, or DFS, announced that it had taken possession of Signature Bank. The DFS appointed the Federal Deposit Insurance Corporation, or FDIC, as the receiver of the bank. In a joint statement, the U.S. Federal Reserve, Treasury Department, and FDIC explained that all Signature depositors would be made whole, similar to a decision made by the federal government to bail out California’s Silicon Valley Bank (SVB).

Government Takes Decisive Action to Protect Depositors and Boost Public Confidence in U.S. Banking System

The crypto-friendly bank Signature Bank has been shut down by financial regulators, and the FDIC is now in control of the New York-based financial institution. In a press release published on Sunday evening, superintendent Adrienne Harris of the New York Department of Financial Services, or DFS, announced the decision. Harris detailed that Signature had approximately $110.36 billion in assets and total deposits of approximately $88.59 billion as of December 31, 2022.

The news follows the collapse of Silvergate Bank and the failure of Silicon Valley Bank, or SVB, which was the second-largest bank collapse in the U.S. since Washington Mutual’s, or Wamu’s, bankruptcy in 2008. While many market observers had to wait the entire weekend to hear about what would happen with SVB, the public doesn’t have to wait any longer, as the U.S. Federal Reserve, Treasury Department, and FDIC addressed the situation in a press statement.

The update, published at 6:15 p.m. ET, explains that the U.S. government is taking “decisive actions to protect the U.S. economy” and bolstering “public confidence in our banking system.” After consulting with secretary of the Treasury Janet Yellen, the FDIC and Federal Reserve approved a plan that fully protects all depositors. The government says that funds will be available for all depositors on March 13 and the resolution will “not be borne by the taxpayer.” In addition to applying this plan to SVB, the resolution of making all depositors whole will also be applied to Signature Bank.

@federalreserve announces Bank Term Funding Program (BTFP) to support American businesses and households, assure banks have ability to meet needs of all their depositors: https://t.co/JIMjkooIDV

— Federal Reserve (@federalreserve) March 12, 2023

At the same time the joint statement came out, another update explained that the Federal Reserve had created a Bank Term Funding Program, or BTFP, to help failed banks and their depositors. “With the approval of the Treasury Secretary, the Department of the Treasury will make available up to $25 billion from the Exchange Stabilization Fund as a backstop for the BTFP. The Federal Reserve does not anticipate that it will be necessary to draw on these backstop funds,” the U.S. central bank declared.

The U.S. central bank added:

The Board is carefully monitoring developments in financial markets. The capital and liquidity positions of the U.S. banking system are strong and the U.S. financial system is resilient.

What impact do you think the government’s actions to protect depositors in the cases of Silicon Valley Bank and Signature Bank will have on the overall banking industry and public trust in financial institutions? Share your thoughts about this subject in the comments section below.

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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.