The New York State Department of Financial Services (NYDFS) said on March 14 that its closure of Signature Bank was not related to the bank’s crypto industry ties.
NYDFS denies Signature anti-crypto closure
Though Signature worked extensively with crypto firms, a representative has denied that the NYDFS shutdown Signature was related to that activity.
Statements cited by various outlets including Fortune read:
“The decisions made over the weekend had nothing to do with crypto…The decision to take possession of the bank and hand it over to the FDIC was based on the current status of the bank and its ability to do business in a safe and sound manner on Monday.”
Previously, Signature board member and former U.S. representative Barney Frank alleged that the bank was closed to “send a strong anti-crypto message.”
Signature was known for serving several clients in the crypto industry including Coinbase.
However, statements from the regulator responsible for its closure clearly refute the notion that this was an issue. The NYDFS initially closed Signature on Monday, March 13.
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The NYDFS initially closed Signature on Monday, March 13.
Signature was known for serving several clients in the crypto industry. Crypto firms including Coinbase and Circle were known to store funds with the bank. As of 2021, at least 30% of Signature’s deposits originated from crypto firms.
At that time, the FDIC took control of all deposits in order to provide customers with access to insured deposits. Later, the Treasury and other regulators, announced a Biden-led emergency plan that would restore all funds — not just insured funds — to users. This plan also applied to Silicon Valley Bank (SVB) customers.
Signature Bank and its executives now face a class action suit, as the company claimed it was financially stable shortly before its closure. The bank does not appear to face any impending charges from regulators at present.
