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

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

AccessTimeIconMar 16, 2023 at 4:43 a.m. UTC
Updated Mar 17, 2023 at 1:15 a.m. UTC

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.


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Cheyenne Ligon

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