Some of you probably already knew this, but today I learned the reason for SVB and Signature Bank's failures was because they refused to participate in reciprocal deposit networks to ensure deposits in excess of $250k were FDIC insured.

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Crazy right? Also part of why they were able to lean into more innovative segments (startups, crypto, etc)

Signature had it's own blockchain at one point ("SigNet" I believe)

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Ah, if that's true, it makes a lot more sense.

I don't have any proof, but my impression at the time was that they were sort of left out of the reciprocal club because they allowed these "sketchier" activities

(I briefly worked with Signature on a crypto escrow product in 2018/19)

Yep! But the silly thing is they could have done all this AND maintains a sweeps network that allowed every depositor to maintain FDIC insurance. If they needed money to fund other services, they would have been able to receive reciprocal deposits from other institutions to fund those activities.