Signature Bank plans to cut its crypto-tied deposits by $8B-$10B, or to under 15%; as of September 2022, ~23.5% of the bank's $103B deposits came from crypto
Helene Braun / CoinDesk :
Context & Ripple Effects
Signature Bank's plan to shed $8B-$10B of crypto-tied deposits — cutting them from roughly 23.5% of its $103B base to under 15% — was an early signal that even banks built around digital-asset clients were treating crypto as a liability rather than a growth engine. The retreat had already begun in practice: Binance said Signature would only process transactions above $100,000 starting February 1, a de facto exit from retail-scale crypto flows.
The strategy did not save the bank. Regulators closed Signature in March 2023, and the aftermath tracked the playbook Silvergate set when it liquidated debt to cover $8.1B of post-FTX withdrawals and cut 40% of staff. The FDIC moved quickly to sell all 40 branches to Flagstar along with non-digital deposits and loans, while crypto clients were left scrambling as Signet went dark.
First-order effects
- Signature's crypto clients lose their primary US banking rail: with the bank closed and Flagstar's bid excluding roughly $4B in crypto deposits, the FDIC gave those clients until April 5 to close accounts.
- Signet, Signature's real-time payment network, stops serving crypto clients entirely — removing one of the last fast fiat on/off ramps after Silvergate's SEN also shut down.
Second-order effects
- Crypto firms are forced onto thinner, costlier banking options, concentrating flows among the few remaining willing banks and raising settlement risk across exchanges and stablecoin issuers.
- Other regional banks facing similar scrutiny accelerate their own retreats, following the pattern reported in February of US banks backing away from crypto companies regardless of exposure size.
Third-order effects
- If regulators keep treating crypto-heavy deposit books as unsound, US crypto businesses may structurally re-bank offshore or through non-bank intermediaries, widening the gap between US policy and the industry's actual operations.
- The episode hardens a template for resolving failed niche banks: sell the conventional franchise (branches, traditional deposits) while winding down or excluding the crypto book, leaving digital-asset clients as residual claimants.
The trend: US banks that scaled around crypto deposits are unwinding or failing, and regulators' resolution choices are deciding which parts of the crypto banking stack survive.