Regulators have closed US-based Signature Bank as it represented the second casualty of the ongoing banking crisis and caused a systemic risk for the system. The crypto-friendly bank reportedly stopped operating on Sunday as it represented a potential risk to the US banking industry and system.

All the depositors and customers of the financial institution were made a whole, covering all of the 40 branches that the financial institution had across New York. Signature Bank provided multiple banking services to real estate companies, cryptocurrency companies, as well as law firms. The bank deposit came in the proportion of 30% only from the crypto industry, representing one of the main reasons why the financial institution connected with Silicon Valley Bank in the first place.

The crypto industry became concerned after the SVB implosion that happened at the end of last week, and it affected the way their banking partners were seen by the system. According to the press release, Signature Bank was also a victim of a bank run, as many companies tried to withdraw their assets and funds at the same time after the SVB incident happened. Many customers had more than USD 250,000 in their deposits and the FDIC insures assets up to only USD 250,000 per user.

Furthermore, the client base of the financial institution appeared to not be diversified enough for the process to go efficiently, so it made the operating system stop working normally. Following the announcement, the closure of the Signature Bank will create some technical challenges for each crypto company as the bank operated Signet. This was a payment system that worked 24/7 and remained focused on enabling crypto organisations to use it for on-ramps and off-ramps.

The bank was in partnership and worked with Circle, OKX, Coinbase, as well as others. Customers were able to access their funds on Monday as the FDIC established a bridge bank that was set to open on the same day, enabling borrowers, depositors, and the overall client base of Signature Bank to automatically become users of the bridge bank. Silicon Valley Bank’s failure SVB collapsed in the US after failing to secure USD 2,2 billion to plug a loss from the sale of assets, mainly US government bonds which were affected by higher interest rates.

Its problems prompted a run on the banks in the US and spanked investor concerns about the general state of the banking sector. The news was announced as customers were told their deposits will be fully protected by the US government, putting pressure on the UK government to act accordingly. More than 200 lenders from UK tech companies signed a letter calling for its action, as the letter mentioned that many financial technology firms did all their banking activity with SVB and that `will therefore go into receivership imminently unless preventative action is taken`.

As part of the moves to restore confidence, regulators unveiled a new way to give banks and financial institutions access to emergency funds. The Federal Reserve said that it will offer assistance through a new Bank Term Funding Program that focused on making it easier for banks to borrow funds during a crisis. HSBC acquired the UK arm of the Silicon Valley Bank, securing the deposits of thousands of British tech firms that hold money at the lender, as the US branch collapsed.

.