Cryptocurrencies did not play a direct role in the collapses of U.S. banks, according to the Treasury Department’s Undersecretary for Finance

Cryptocurrencies did not play a direct role in the collapses of U.S. banks, according to the Treasury Department's Undersecretary for Finance

Despite popular opinion, cryptocurrencies were not expected to influence the final collapse of three US banks. This is the opinion of the Treasury Department’s Undersecretary for Finance. Meanwhile, Martin Gruenberg reports that the FDIC plans to return $4 billion in Signature cryptocurrency deposits soon.

Return of crypto-related deposits

Martin Gruenberg, chairman of the Federal Deposit Insurance Corporation, has announced that the FDIC plans to return some $4 billion in deposits related to Signature Bank’s digital asset banking business. This is expected to take place no later than early April.

At a March 29 hearing before the House of Representatives Committee on Financial 

Services, which is investigating federal regulators’ responses to recent banking collapses, Gruenberg said deposits that were not included in New York Community Bancorp’s bid for Signature would be returned “early next week.” The case involves as much as $4 billion in deposits related to digital assets, and reports indicate that the FDIC will close all cryptocurrency-related accounts that are not part of the NYCB deal by April 5 if depositors do not move their funds.

Gruenberg stressed that Signature’s payment platform, Signet, along with deposits of digital assets were not included in the NYCB’s offering, but were “currently being marketed” to potential buyers. The FDIC, along with New York financial regulators, closed the cryptocurrency-friendly bank on March 12, citing risks to the U.S. economy following the collapse of Silicon Valley Bank and Silvergate Bank.

Cryptocurrencies exempt from prosecution

In a hearing on the collapse of U.S. banks, Nellie Liang, Under Secretary for Domestic Finance at the U.S. Treasury Department, expressed her views on the role of cryptocurrencies in the collapse of Signature and Silicon Valley Bank. She said she does not believe cryptocurrencies played a direct role in their failure:

“Although I know that Signature had activities related to digital assets, I don’t think this is the main cause.”

The March 29 hearing was the second in which Liang, FDIC Chairman Martin Gruenberg and Fed Vice Chairman for Supervision Michael Barr spoke before lawmakers about the banks’ collapse. The previous one took place the day before, on March 28, during which Gruenberg claimed that Silvergate Bank had mismanaged risks, which ultimately resulted in its collapse.

Government battle between supporters and opponents of cryptocurrencies

While some lawmakers and regulators appear to be suggesting that banks join forces with digital asset companies, many have criticized the merger, finding it without merit. Barney Frank, a former member of the House of Representatives, believes that officials are trying to incite “a very strong message against cryptocurrencies.” The claim that the bank had no solvency problems at the time of its closure, in his view, is meant to serve that narrative. However, as some commentators note, the attempt to undermine the credibility of cryptocurrencies by overly linking them to banks is purely artificial.

Disclaimer: Blockbulletin does not take accountability of investments based on the information of the website. We highly advice readers to make extensive research prior to any invest

Share this article

More news


XRP outperforms Bitcoin and Ethereum

In the past week, XRP decisively outperformed its main rivals, Bitcoin (BTC) and Ethereum (ETH), in terms of capital flows. Moreover, it recorded an impressive $2.7 million…

Solana and Avalanche on the eye of investment funds

Two alternative coins, Solana (SOL) and Avalanche (AVAX), are gaining increasing interest and are successively attracting the attention of investment funds. Although bitcoin (BTC) remains the main…
All articles loaded
No more articles to load


Cryptocurrency wallets

Cryptocurrency wallets

We talked about security when trading crypto assets in an article titled “Online security“. We also mentioned how important it…
hardware wallets

Cryptocurrency hardware wallets

From the article titled “Cryptocurrency wallets” you learned about the different types of wallets. They were briefly characterized there. Let’s…
Where to buy cryptocurrency brokers

Which cryptocurrency Brokers to use

In the article “Where to Buy Cryptocurrencies (Exchanges)“, we introduced you to which exchange platforms you can purchase cryptocurrencies on.…
Trading cryptocurrencies

Trading cryptocurrency

In the cryptocurrency market, you face many opportunities to invest in cryptocurrency or buy or sell cryptocurrency. If you want…
All articles loaded
No more articles to load


All articles loaded
No more articles to load

Latest news

All articles loaded
No more articles to load