Signature Bank Collapse 2025: Crypto Lender Fails Amid Market Turmoil, Assets $110B
In 2025, Signature Bank, a major crypto lender with $110 billion in assets, was shut down by New York regulators, marking the third-largest bank failure in U.S. history. This event follows recent collapses in the crypto banking sector, highlighting systemic risks and market volatility.
Signature Bank's closure ranks as the third-largest bank failure in U.S. history, signaling major shifts in crypto banking.
In a significant 2024 development, Signature Bank, a leading lender to the cryptocurrency sector, was closed by New York state regulators. This shutdown represents the third-largest banking failure ever recorded in the United States, surpassed only by Silicon Valley Bank's recent collapse and the 2008 failure of Washington Mutual.
Authorities cited systemic risks as the primary reason for the closure, appointing the FDIC as the bank's receiver. This marks the third major bank failure within a week, following Silvergate Bank's liquidation and Silicon Valley Bank's shutdown. As of the end of 2023, Signature Bank held $110 billion in assets and approximately $88.6 billion in deposits, ranking it 29th by asset size among U.S. banks. Its market valuation stood at $4.4 billion just before the closure.
A joint statement from the FDIC, Federal Reserve, and Treasury Department assured that all depositors would be fully protected, emphasizing that taxpayers would not bear any losses. Depositors retain complete access to their funds, while equity and bondholders face total losses, mirroring the outcomes seen with Silicon Valley Bank.
Signature Bank operated across multiple states including New York, Connecticut, California, Nevada, and North Carolina. Nearly 25% of its deposits originated from the crypto industry, making it a pivotal financial partner for digital asset firms. However, following the collapse of major crypto exchanges like FTX, the bank experienced a 17% decline in deposits during Q4 2022 compared to the previous year. The Federal Reserve's interest rate hikes further pressured the bank's financial stability.
In the weeks leading to its shutdown, Signature Bank sought to reassure investors by highlighting its strong, diversified financial position and plans to reduce crypto exposure. Despite these efforts, investor confidence waned, leading to a 20% drop in Signature Bank's shares on the Friday before closure and a 76% decline over the past year.
The ripple effects impacted the broader U.S. banking sector, with shares like First Republic Bank plunging 70% at Monday's market open, dragging the financial sector down over 3%.
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