Republic First acquired by Fulton Bank becomes the first bank failure in the U.S. this year
The Federal Deposit Insurance Corporation (FDIC) announced on Friday that it has closed Republic First Bank and reached an agreement for Fulton Bank to acquire the bank's deposits and most of its assets. According to the FDIC's statement, the 32 branches of Republic First Bank in New Jersey, Pennsylvania, and New York will reopen as branches of Fulton Bank on Saturday. The regulatory agency stated that depositors of Republic First Bank, headquartered in Philadelphia, will become depositors of Fulton Bank, headquartered in Williamsport, Pennsylvania. According to FDIC data, as of the end of January, Republic First Bank had approximately $6 billion in assets and $4 billion in deposits. The FDIC expects the failure to result in a loss of $667 million to the deposit insurance fund.
US FTC warns consumers that cryptocurrencies are not covered by the FDIC
Federal Trade Commission (FTC) in the United States issued a consumer warning, warning that encrypted assets are not covered by the Federal Deposit Insurance Corporation (FDIC). Cristina Miranda, a consumer education expert at the Federal Trade Commission, explained that if your bank has FDIC insurance, then if the bank fails, you can get up to $250,000 in protection. In contrast, if a cryptocurrency company fails, the funds you deposit with the cryptocurrency financial services provider will not be covered or protected by the Federal Deposit Insurance Corporation.
Golden Finance Note: The Federal Deposit Insurance Corporation (FDIC) is an independent federal agency that provides insurance for bank deposits held by member institutions, with a maximum insurance amount of $250,000 per depositor.
FDIC to include cryptocurrency activity in bank risk reports
The Federal Deposit Insurance Corporation (FDIC) will include cryptocurrency activities as one of the five categories in bank risk reports. According to FDIC, under authorization, it will issue additional statements related to bank institutions participating in activities related to encrypted assets. It supplements the consistent view of US banking institutions (including the Currency Supervision Bureau and the Federal Reserve) that banks should generally keep their distance from digital assets unless their federal regulatory agencies are satisfied with specific activities. <br>
FDIC: Cryptocurrency Activity Poses Risk to U.S. Banking System
According to the Federal Deposit Insurance Corporation (FDIC) in its 2023 annual risk review, "crypto asset-related activities may bring novel and complex risks that are difficult to fully assess to the US banking system." The report pointed out some key risks, including fraud, legal ambiguity, misleading or inaccurate statements or disclosures, immature risk management practices, and platform vulnerabilities. FDIC also stated that the interconnections within the crypto asset industry may bring contagion risks to banks with larger risk exposures. It is worth noting that the review emphasized the possibility of deposit outflows for banks holding stablecoin reserves due to stablecoin run risks. FDIC, together with other banking regulatory agencies, recommends further monitoring and guidance measures to address these crypto asset risks.
FDIC Issues Cease and Desist Notice to Crypto Firm Unbanked Over False Insurance Claims
The FDIC has issued a cease and desist notice to Unbanked, Inc., a Georgia-based technology company, for making false and misleading claims about its insurance status. The agency alleges that Unbanked falsely implied that financial products, including cryptocurrencies, were insured by the FDIC. Unbanked announced in June that it would be winding down its operations due to a lack of investment and a challenging regulatory environment in the US. The FDIC has demanded that Unbanked remove any statements suggesting that funds held in cryptocurrencies or other uninsured financial products are protected by FDIC insurance and provide written confirmation of compliance within 15 days.
Circle Was Top Depositor Helped by Government-Backed Guarantee of Silicon Valley Bank
June 23 (Cointime) - According to documents from the Federal Deposit Insurance Corporation (FDIC), Circle, the issuer of the USDC stablecoin, was the top depositor at Silicon Valley Bank with the help of a government-backed guarantee.
US Banking Regulator Orders OKCoin to Remove Misleading Claims of FDIC Protection
OKCoin has been ordered by the US banking regulator to remove any misleading statements that suggest its customers' accounts are protected by the FDIC. The regulator has warned that OKCoin is making false claims and has demanded that any offending claims be removed immediately.
Americans Pull $472 Billion Out of US Banks in Three Months As Depositors Exit in Historic Numbers
New data from the FDIC reveals that Americans are withdrawing their money from banks at a rate not seen in 39 years. In the first quarter of this year, depositors took out a total of $472 billion, with uninsured deposits being the primary driver of the flight. This comes after the failures of several banks, triggered in part by the Federal Reserve's interest rate hikes, and has led to a surge in assets held by money market mutual funds, which reached a record high of $5.6 trillion at the end of the quarter.
CFPB warns against storing money on uninsured payment apps
The Consumer Financial Protection Bureau (CFPB) has cautioned Americans to keep their money in insured accounts rather than uninsured payment apps, as the risk of loss in the event of a crisis is becoming more concerning due to the increasing popularity of nonbank peer-to-peer (P2P) payment apps, including those used for crypto asset transactions. While awareness of Federal Deposit Insurance Corporation (FDIC) coverage has grown, billions of dollars are still being stored on payment service apps without FDIC coverage. Many P2P apps offer stored value services that resemble deposit accounts, and payment service providers are incentivized to encourage customers to store funds with them for investment purposes. However, even if customer funds were held in an FDIC-insured account, eligibility for pass-through deposit coverage is only determined after a failure has occurred, and the insurance only protects against the failure of the bank, not the payment service.
FDIC Chairman Blames Signature Bank's Involvement in Crypto Industry for Its Collapse
According to FDIC Chairman Martin Gruenberg, Signature Bank's involvement in the digital asset industry was a major factor in its collapse. Gruenberg also acknowledged the FDIC's shortcomings in not taking action sooner to prevent the crisis from spreading. The agency's supervision could have been stronger, he said. Signature Bank was not exclusively a crypto bank, but its efforts towards the industry became more pronounced during the pandemic-era bull run. However, the fall of FTX was a major turning point, and Signature Bank distanced itself from the industry in a bid to reduce its exposure.
