FDIC Staff Report Says Digital Asset-Linked Depositors Fueled Rapid 2023 Bank Runs

An FDIC staff report released last week reviewed deposit movements at SVB, Signature Bank, and First Republic during the 2023 failures. It said depositors connected to the digital asset sector and users of active escrow accounts were more prone to pull funds, with Signature's active escrow balances falling 88% between March 7 and March 17, 2023. The report also highlighted heavy wire-transfer outflows and high uninsured exposure among these deposits.