FDIC Denies Report Signature Bank Purchaser Must Divest Crypto

Reuters reported the FDIC wanted Signature’s buyers to “give up” the bank's crypto activities.

AccessTimeIconMar 17, 2023 at 1:09 a.m. UTC
Updated Mar 17, 2023 at 3:13 p.m. UTC
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The Federal Deposit Insurance Corporation denied it would require any purchaser of Signature Bank to divest its crypto activities.

The FDIC responded to a Wednesday Reuters report that said “any buyer of Signature must agree to give up all the crypto business at the bank,” citing two unnamed sources. An FDIC spokesperson denied this to Reuters.

An FDIC spokesperson told CoinDesk in an email that “the receivership does not end until all the bank’s assets are sold and all the claims against the bank are addressed, and the acquirer decides the conditions of their bid.”

The acquirer will tell the FDIC “what assets and liabilities from the failed bank it is willing to take,” the spokesperson said, citing the agency’s resolution handbook. The spokesperson also referred CoinDesk to two joint statements published by the FDIC, Office of the Comptroller of the Currency and the Federal Reserve, one of which states that banks are “neither prohibited nor discouraged” from providing services to any sector.

Reuters reported that an FDIC spokesperson told the news service that “the agency would not require divestment of crypto activities as part of any sale.”

Signature was seized over the weekend by the New York Department of Financial Services and turned over to the FDIC. While Signature board member Barney Frank (co-sponsor of the Dodd-Frank Act when he was in Congress) claimed it was a political move, possibly caused by anti-crypto sentiment, a NYDFS spokesperson said in a statement the regulator had lost confidence in the bank’s leadership after a bank run last Friday and a lack of “reliable” information over the weekend.

The FDIC is now looking to auction Signature and Silicon Valley Bank – another bank seized by a state regulator last week – possibly by the end of this week, Reuters reported.

UPDATE (March 17, 2023, 01:35 UTC): Clarifies timeline, adds links.


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Nikhilesh De

Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.

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