New York’s Department of Financial Services closed Signature Bank on Sunday “to protect depositors” and appointed the Federal Deposit Insurance Corp. as the bank’s receiver, the state regulator said.

The FDIC, in turn, transferred all Signature Bank deposits and substantially all of the company’s assets to Signature Bridge Bank, which will be operated by the regulator. The FDIC named former Fifth Third CEO Greg Carmichael as the bridge bank’s chief executive.

An auction for Signature could begin as soon as Monday, a person familiar with the matter told Bloomberg. The bank counted roughly $110.4 billion in assets and $88.6 billion in deposits as of Dec. 31, making it the 30th-largest U.S. bank.

Signature “failed to provide reliable data and created a lack of confidence in the bank’s leadership,” Adrienne Harris, NYDFS’s superintendent, said in a statement.

Signature’s closure marks the third-largest bank failure in U.S. history — and a ripple effect in the banking of crypto assets after the Friday failure of Silicon Valley Bank.

Barney Frank, a Signature board member and former Democratic congressman for whom half of the Dodd-Frank Act is named, called Signature’s weekend wobble “an SVB-generated panic.”

“We were fine until the last couple of hours on Friday,” he told The Wall Street Journal.

A number of Signature’s business customers, concerned over the FDIC’s $250,000 limit on deposit insurance, pulled their deposits from the bank Friday after the failure at SVB. The situation, however, had stabilized by Sunday, a person familiar with the matter told Bloomberg.

“I think that if we’d been allowed to open tomorrow, that we could’ve continued — we have a solid loan book, we’re the biggest lender in New York City under the low-income housing tax credit,” Frank told Bloomberg on Sunday. “I think it was a classic case of being illiquid but not insolvent.” 

All Signature depositors will be made whole — the bank’s insured and uninsured customers will be able to access their deposits Monday under a “systemic risk exception” — and no losses will be borne by taxpayers, the FDIC, Federal Reserve and Treasury Department said in a joint statement Sunday.

As it stands, Signature’s failure may have as much to do with diversification as anything else. That goes for the proportion of assets tied to the crypto sector but also to its customer base — overwhelmingly made up of businesses. Nearly 90% of Signature’s deposits — more than $79 billion — were not FDIC-insured as of December, according to regulatory filings.

As for crypto, the bank was in the process of shrinking its exposure. About 27% of its deposits were from digital-asset clients as of early last year, according to The Wall Street Journal. But in December, after the collapse of crypto exchange FTX, Signature said it planned to shed as much as $10 billion in deposits from digital-asset clients — meaning crypto would comprise 15% to 20% of the bank’s business rather than 27%. The bank cut ties with the international business of Binance, and said it would limit the share of deposits from any single digital-asset client.

As of Wednesday, Signature still had $16.5 billion in crypto-related client deposits, Bloomberg reported.

But Silicon Valley Bank’s failure Friday left digital-asset firms on the hunt for a new bank — and Signature had developed a reputation since entering the crypto space in 2018, of being friendly to the sector. Some of those companies now are searching for a new bank for the second, or even third, time within weeks. 

Crypto derivatives platform LedgerX, for example, instructed clients last month to send domestic wire transfers to Signature instead of Silvergate, which itself shuttered Wednesday.

Coinbase, Circle and Kraken, for example, all had accounts with Signature.

Jeremy Allaire, Circle’s CEO, wrote on Twitter that his company will settle transactions through BNY Mellon now that Signature is closed.

The closure of Signature’s crypto payments network this month made Signature’s Signet the leading outlet to allow commercial crypto clients to make global real-time payments in dollars seven days a week.

“It really sucks, I mean, for the whole industry to have to lose two banks that are servicing the industry for retail funding,” Kraken CEO Jesse Powell said on Twitter.

Nisa Amoils, a managing partner at A100x Ventures, gave the situation a wider view.

“Crypto is almost completely shut out of US banking now,” Amoils told Bloomberg.

The takeover of Signature by regulators also means the bank’s senior management has been removed, according to the joint statement by the Fed, FDIC and Treasury. Signature had already been in a transition at the C-suite level. The bank announced last month that CEO Joseph DePaolo would transition into a senior adviser role this year, with Chief Operating Officer Eric Howell succeeding him as president March 1.

Signature had 40 branches in New York, California, Connecticut, North Carolina and Nevada, according to the FDIC.

Shares of the bank fell 23% on Friday, its worst day since it went public in 2004, according to The Wall Street Journal. Its stock had dropped more than 75% over the past 12 months, the outlet reported.