U.S. FDIC tells Signature crypto clients to close accounts by April 5

Re:U.S. FDIC tells Signature crypto clients to close account... by SideQuark on Wednesday March 29, 2023 @05:48AM (#35354811)

So if people suddenly put 1 trillion in the bank magically makes up 8% of that out of nowhere?

Yeah, it's an absurd claim and the Fed is correct in denying it. It's welcome to exist somewhere people will believe it has magic money printing mechanisms.

Heck, if it worked, the bank could put in $1m, suddenly have $1.08m, invest that in the same money magic mill repeatedly, and soon have all the money it wanted.

All this on the "promise" that nothing will go bad.... Sorry, the purpose of insurance is to share volatility, and it works quite well. The purpose of claims like Custodia is making is to skirt regulations that exist for solid, historically demonstrated, reasons, so they can play loose with people's money.

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Re:U.S. FDIC tells Signature crypto clients to close account... by matt_kantor on Wednesday March 29, 2023 @10:56AM (#35358195)

I know nothing about Custodia, but I'd guess they either wouldn't accept your deposit or would charge an 8% fee on it.

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Re:U.S. FDIC tells Signature crypto clients to close account... by SpaghettiCthulu on Wednesday March 29, 2023 @11:02AM (#35358285)

Maybe I'm misunderstanding, but I think the point is that there would be fees to ensure that they always have an extra $0.08 on hand for every $1 you put in.

Not sure what that would look like. Maybe a fee on every deposit?

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Re:U.S. FDIC tells Signature crypto clients to close account... by dragontamer on Friday March 31, 2023 @09:50AM (#35387140)

Maybe the details of how it worked were absurd and unworkable and the FDIC shit it down.

Occam's razor.

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