The US Federal Deposit Insurance Corporation (FDIC) has just completed an investigation into the collapse of Signature Bank, which admitted cryptocurrencies.
Martin Gruenberg, chairman of the agency, has said this was facilitated by the risks associated with digital assets.
According to the regulator, the "root of the problems" was mismanagement of the financial institution. Regulators shut down Signature in March following Silicon Valley Bank. Subsequently, the US Treasury, the Fed and the FDIC announced the reorganization of the institutions.
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According to the report:
"Signature failed to assess the risks and exposure to cryptocurrency deposits and exposure to industry shocks during 2022 and 2023. Inadequate risk management resulted in the bank being unable to manage its liquidity during a period of stress."
The FDIC believes damages from Signature's collapse amount to approximately $2.4 billion. In addition, agency representatives have pointed out that 67% of the deposits were uninsured.
The FDIC gave in March Signature's crypto customers a week to withdraw funds and close their accounts.