Signature Bank was shut down by the New York State Department of Financial Services (NYDFS) on Wednesday and transferred to the Federal Deposit Insurance Corporation (FDIC). Since then, the FDIC is looking for a buyer, but the buyer is reportedly required to agree on one big caveat. Do not handle crypto assets.
Reuters reported on the afternoon of the 15th, citing a person familiar with the matter.
Two days before the signing, Silicon Valley Bank collapsed, and before that, Silvergate Bank decided to voluntarily liquidate. Three banks were known as crypto-focused or crypto-forward banks.
The U.S. Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC) have accused Signature Bank, whose customers accounted for one-fourth of its deposits in cryptocurrencies, may have allowed money laundering due to lax oversight. reportedly under investigation by the SEC.
In February, a class action lawsuit was filed against the bank, alleging it was aware of and facilitated the “now infamous FTX scam.” Specifically, the bank alleged that it was aware of and allowed to “confuse FTX customer funds within Signet, the bank’s blockchain-based payment network.”
Is it an anti-crypto asset message?
Many in the crypto industry, including former Acting Commissioner of the Office of the Comptroller of the Currency (OCC) and one-time CEO of Binance.US, Brian Brooks, believe that there are three crypto-friendly banks. We speculate that the shutdown is a concerted effort by regulators to keep the crypto industry out of the banking system.
Signature Bank board member and former congressman Barney Frank, who co-authored the Dodd-Frank Act aimed at preventing another financial crisis, also said the regulator’s move was motivated by anti-crypto assets. So, Signature Bank remained solvent, but regulators stepped in to send the message, he told CNBC.
“I think part of what happened was that regulators wanted to send a very strong anti-crypto message,” Frank said.
Meanwhile, the NYDFS denied that crypto assets were involved in Signature Bank’s decision to suspend operations. It said it was due to a “crisis of confidence” in the bank’s leadership.
The bid to buy Signature Bank is open until March 17, according to Reuters.
As of this writing, the FDIC did not respond to a request for comment.
｜Translation: coindesk JAPAN
｜Editing: Takayuki Masuda
｜Original: Signature Bank’s Prospective Buyers Must Agree to Give Up All Crypto Business: Report