According to reports, Signature Bank, which was closed down by regulators in New York over the weekend, is now up for sale. However, any interested buyer would be required to accept a significant condition: a prohibition on dealing with cryptocurrencies.
Sources revealed to Reuters that on Wednesday evening that Reuters was the first to report the news. Moreover, the Federal Deposit Insurance Corp. has announced that offers for Signature Bank must be submitted by Friday.
The bank, which is based in New York, was closed over the weekend, just two days after the failure of Silicon Valley Bank in California, and less than a week after the voluntary closure of Silvergate Bank, another California-based financial institution. All three of these banks were known to be crypto-friendly.
As per reports, Signature Bank had a significant portion of its deposits coming from crypto clients, accounting for about 25% of its total deposits. The bank was allegedly being investigated by the U.S. Securities and Exchange Commission and the Department of Justice for not exercising sufficient monitoring, which could have facilitated money laundering.
In February, a class-action lawsuit was filed against Signature Bank, alleging that the bank was aware of and facilitated the “now infamous FTX fraud.” Specifically, the lawsuit claims that Signature Bank permitted the commingling of customer funds belonging to the FTX exchange within its proprietary blockchain-based payments network, Signet.
Additionally, several voices within the crypto industry, including Brian Brooks, former acting Comptroller of the Currency and former CEO of Binance.US, have suggested that the recent closure of the three crypto-friendly banks may be part of a coordinated effort by regulators to disconnect the crypto industry from the traditional banking system.
Barney Frank, a board member of Signature Bank and former Democratic U.S. congressman who co-authored the Dodd-Frank Act, also implied that the takeover was motivated by an anti-crypto agenda. He told CNBC that Signature Bank was financially sound and that regulators intervened anyway to send a message.
Barney Frank
I think part of what happened was that regulators wanted to send a very strong anti-crypto message.
The New York Department of Financial Services has refuted any claims that its decision to close down Signature Bank was related to crypto. Rather, the department stated that the closure was due to a “crisis of confidence” in the bank’s leadership.
