FDIC Study Links Digital Assets to Fastest Bank Runs in US History
Tech FDIC Study Links Digital Assets to Fastest Bank Runs in US History The Federal Deposit Insurance Corporation (FDIC) released a report last week, detailing deposit flows at Silicon Valley Bank (SVB), Signature Bank (SBNY), and First Republic Bank (FRB). The staff study stated that depositors associated with the digital asset sector, along with active escrow depositors, were more likely to run during the 2023 failures. Signature Bank had active escrow deposits that included pooled customer funds for investment-related companies, including firms facilitating digital asset investment, and banking-as-a-service financial technology companies. Active escrow deposits made up 13% to 15% of SBNYs deposits before the run. The FDIC explained that beneficial owners of active escrow funds most likely had the ability to move funds quickly. FDIC Chairman Travis Hill said: “This study provides a highly detailed account of deposit flows during the fastest bank runs in U.S. history.” In 2023, SVB failed on March 10 after depositors began running on March 9. SBNY failed on March 12 after runs started on March 10. FRB remained open under stress until May 1, when regulators closed the bank and JPMorgan Chase Bank acquired it. The FDIC tied all three failures to broad-based deposit runs. Active escrow deposits at SBNY plummeted









