Coindesk Logo

Signature Bank’s Prospective Buyers Must Agree to Give Up All Crypto Business: Reuters

Signature Bank’s Prospective Buyers Must Agree to Give Up All Crypto Business: Reuters

Signature Bank’s Prospective Buyers Must Agree to Give Up All Crypto Business: Reuters

The Federal Deposit Insurance Corp. later denied Reuters' reporting.

The Federal Deposit Insurance Corp. later denied Reuters' reporting.

The Federal Deposit Insurance Corp. later denied Reuters' reporting.

AccessTimeIconMar 16, 2023, 4:43 AM
Updated Mar 17, 2023, 1:15 AM
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

UPDATE (March 17, 2023, 00:10 UTC): The FDIC denied Reuters' reporting on Thursday. Click here for more.

Signature Bank is on the market after being shuttered by New York state regulators on Sunday, but any potential buyer reportedly has to agree to a major caveat: no crypto.

Reuters first reported the development on Wednesday evening, citing people familiar with the matter. The Federal Deposit Insurance Corp. said bids for the bank must be submitted by Friday, the report said.

The New York-based bank’s weekend closure came two days after the collapse of another bank, California-based Silicon Valley Bank, and less than a week after the voluntary closure of another California-based bank, Silvergate Bank. All three of the now-defunct banks were considered crypto-friendly financial institutions.

Signature Bank, whose crypto clients accounted for a quarter of its deposits, was reportedly under investigation by the Department of Justice and the U.S. Securities and Exchange Commission for potentially lax monitoring that may have enabled money laundering.

A class-action lawsuit was filed against Signature Bank in February, alleging the bank knew about – and facilitated – the “now infamous FTX fraud.” Specifically, the suit accuses Signature Bank of having knowledge of and permitting “the commingling of [the FTX exchange's] customer funds within its proprietary, blockchain-based payments network, Signet.”

Many in the crypto industry – including former acting Comptroller of the Currency, and one-time Binance.US CEO, Brian Brooks – have speculated the closure of the three banks is indicative of a coordinated effort by regulators to choke the crypto industry off from the banking system.

Barney Frank, a Signature Bank board member and former Democratic U.S. congressman who co-authored the Dodd-Frank Act, also suggested the takeover was spurred by an anti-crypto motive, telling CNBC that Signature Bank was solvent – and that regulators intervened anyway to send a message.

“I think part of what happened was that regulators wanted to send a very strong anti-crypto message,” Frank told CNBC.

However, the New York Department of Financial Services has denied that crypto had anything to do with its decision to shutter Signature Bank, instead saying that was due to a “crisis of confidence” in the bank’s leadership.

The FDIC didn't immediately return a request for comment.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Cheyenne Ligon is a CoinDesk news reporter with a focus on crypto regulation and policy. She has no significant crypto holdings.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.