Signature Bank to Reduce Crypto-Tied Deposits by as Much as $10 Billion

Nearly a quarter of the Wall Street bank's current deposits come from crypto-related businesses.

AccessTimeIconDec 6, 2022 at 11:10 p.m. UTC
Updated May 9, 2023 at 4:04 a.m. UTC

CORRECTION (Dec. 7, 21:32 UTC): A previous version of this story incorrectly stated that Signature was specifically looking to exit the stablecoin business.

Signature Bank (SBNY) will shrink its deposits tied to cryptocurrencies by $8 billion to $10 billion, signaling a move away from the digital asset industry for the bank that until recently had been one of the most crypto-friendly companies on Wall Street.

  • Bitcoin Price Crossed $57K; Is Stablecoin USDC Making a Comeback?
    02:12
    Bitcoin Price Crossed $57K; Is Stablecoin USDC Making a Comeback?
  • Grayscale Begins Trading First Spot Bitcoin ETF; Circle Files for IPO
    02:27
    Grayscale Begins Trading First Spot Bitcoin ETF; Circle Files for IPO
  • Closing Arguments Start in Sam Bankman-Fried's Trial; Could Bitcoin Reach $150K by 2025?
    02:23
    Closing Arguments Start in Sam Bankman-Fried's Trial; Could Bitcoin Reach $150K by 2025?
  • Circle’s Chief Strategy Officer on Future of Stablecoins, Crypto Regulation
    12:57
    Circle’s Chief Strategy Officer on Future of Stablecoins, Crypto Regulation
  • “We are not just a crypto bank and we want that to come across loud and clear,” Signature Bank’s CEO Joe DePaolo said at an investor conference in New York hosted by Goldman Sachs Group on Tuesday.

    Nearly a quarter of the New York-based bank’s $103 billion in total deposits, or roughly 23.5%, came from the crypto industry as of September 2022. But given the recent “issues” in the space, Signature will reduce that amount to under 20% and potentially under 15% eventually, DePaolo said.

    FTX was one of the bank’s clients, although the crypto exchange’s deposits with Signature amounted to less than 0.1% of the bank’s overall deposits. Still, the relationship between the two caused Signature’s shares to drop almost 20% in November.

    Stablecoin firms represent a sizable portion of Signature's crypto-related business, with Circle adding Signature as its leading financial institution for USDC reserve deposits in April of last year.

    “We recognize that in certain cases, especially as we look at stablecoins and other parties in that space, that there’s a better way for us to utilize our capital,” DePaolo said.

    Signature Bank had been considered one of the most crypto-friendly banks on Wall Street alongside rival Silvergate Bank, which on Tuesday was asked by several U.S. senators to address its supposed role in facilitating transfers between FTX and sister company Alameda Research. Silvergate said FTX made up nearly 10% of its $11.9 billion in deposits from digital asset customers, and its stock has tumbled as a result of FTX’s collapse.

    UPDATE (Dec. 7, 21:32 UTC): Updated to reflect that Signature plans to reduce its cryptocurrency exposure to between 15% and 20%.

    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

    Helene Braun

    Helene is a New York-based reporter covering Wall Street, the rise of the spot bitcoin ETFs and crypto exchanges. She is also the co-host of CoinDesk's Markets Daily show. Helene is a graduate of New York University's business and economic reporting program and has appeared on CBS News, YahooFinance and Nasdaq TradeTalks. She holds BTC and ETH.