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Crypto-friendly Signature Bank (SBNY) announced that it would shrink its deposits tied to crypto assets by $8 – $10 billion.
SBNY’s decision indicates that the bank might be distancing itself from the crypto industry. SBNY’s CEO Joe DePaolo commented on the decision and said:
“We are not just a crypto bank and we want that to come across loud and clear,”
Signature Bank was the only U.S. bank that was federally regulated and took a friendly stance towards crypto. The bank started to accept deposits in crypto four years ago from crypto exchanges, stablecoin issuers, and miners. This initiative tripled the bank’s existing $33.4 billion deposits at the time.
Is it the FTX collapse?
The bank’s decision came soon after the FTX collapse took a toll on all crypto institutions. However, the bank claims that it is not experiencing any insolvencies due to the collapse. In November, SBNY said that its deposit relationship with FTX amounted to less than 0.1% of its overall deposits.
According to the numbers from mid-November, the bank has $103 billion in deposits, and around 23% of this amount is related to the crypto industry. The bank is looking to immediately diminish this amount to less than 20% and to below 15% in the near future with this decision.
Journalist at CryptoSlate
Zeynep is an academic who turned to crypto in 2018. Originating in social sciences, she is especially interested in the social impact of blockchain and cryptocurrencies and strongly believes in their transmuting power.
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