FDIC Demands Any Buyer of Signature Bank Give Up on Crypto: Reuters

As the Federal Deposit Insurance Corporation prepares to auction off Signature Bank, it has made it clear that the buyer has to stop doing business with crypto, two anonymous sources told Reuters.

If it’s true, it would seem to confirm suspicions that regulators targeted Signature Bank because it did business with the crypto industry.

Earlier this week, Barney Frank, an ex-congressman who helped pen the Dodd-Frank Act, told CNBC that banking regulators shuttered the bank to send “a very strong anti-crypto message.” Frank also served on the Signature Bank board.

The New York Department of Financial Services was quick to dismiss his claim, saying in a statement the decision to place Signature into receivership “was based on the current status of the bank and its ability to do business in a safe and sound manner.”

But now, there are signs that the FDIC wants to make sure the bank doesn’t return to the private sector with its crypto business intact. In fact, only bidders with existing banking charters will be allowed to review the bank’s financials before submitting an offer, according to Reuters.

The FDIC said it will accept bids until tomorrow for Signature Bank, which it shuttered on Sunday, and Silicon Valley Bank, which it shut down on March 10. For Silicon Valley Bank, or SVB, this will be the regulator’s second attempt to sell the institution after a failed auction on Sunday.

The FDIC tried to sell what remains of SVB over the weekend, but couldn’t find a buyer willing to acquire the entire bank. The sources told Reuters that the FDIC would prefer to auction off both banks in their entirety, but will entertain bids for individual parts if it’s unsuccessful.

Signature Bank shares started trading on Nasdaq under the SBNY ticker in 2004. By early 2022, its share price hit an all-time high of $365.71 per share.

The bank also offered an instant settlement network for digital payments, Signet, which was a rival to a similar service at Silvergate Bank.

By the time Nasdaq halted trading on SBNY on March 10, it’s shares were trading for $70.

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Sourced from decrypt.co.

Written by Stacy Elliott on 2023-03-16 14:35:27.

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