Crypto Not It, Regulators Denied Signature Bank Was Targeted For Ties With Digital Assets

Regulators have denied claims that Signature Bank, a New York-based financial institution, was targeted due to its ties with digital assets. Despite concerns about the regulatory challenges associated with crypto, regulators have stated that there was no evidence to support the notion that the bank’s engagement with digital assets was the reason for the action taken against it. The incident highlights the complexity of the crypto regulatory landscape and the need for clear guidelines around the use of digital assets in traditional financial institutions.

Signature Bank director and former Congressman Barney Frank believed that the recent shutdown of the crypto-friendly bank by US regulators was a strong anti-crypto message. However, the Department of Financial Services (DFS) clarified that the resolution had nothing to do with crypto. Instead, it was due to the bank’s inability to provide reliable and consistent data, which led to a crisis of confidence in its leadership. While the acquisition may not be related to the bank’s crypto activities, it could still impact the industry’s trust in regulators in the long run. Signature Bank is the third regional bank to collapse in a week, following the collapse of other crypto-friendly banks Silicon Valley Bank and Silvergate. The ripple effect of these collapses has affected the US stock market and European banks. Gemini, the former partner of Signature, confirmed that they had no customer funds or Gemini dollars at the bank and that they continue to actively monitor counterparty risk to prevent any impact to their customers.

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