The FDIC has denied a recent report claiming that the buyer of Signature Bank must give up on crypto. This news comes as a relief to those interested in the future of cryptocurrency and its place in banking. With this denial, it seems that the FDIC is acknowledging the importance of cryptocurrencies and their potential to revolutionize the banking industry. This is great news for those who believe in the power of crypto and its ability to transform the way we do business.
FDIC Denies Reports of Crypto Ban for Signature Bank
The Federal Deposit Insurance Corporation has denied reports that its prospective Signature Bank buyers will have to stop doing business with crypto. Recent reports by Reuters, citing two anonymous sources, claimed that the buyer of Signature Bank would have to agree to give up all crypto business at the bank. However, the FDIC responded to these reports, saying that it “would not require divestment of crypto activities as part of any sale.” The FDIC spokesperson pointed to previous statements from the Chairman, Martin Gruenberg, stating that the FDIC is not looking to prohibit any particular activity by banks.
Initial reports of the FDIC forcing Signature Bank’s buyer to abandon crypto activities appeared to confirm suspicions that regulators targeted the bank because it did business with the crypto industry. This sparked a furious response from the crypto industry. Ex-congressman, Barney Frank, who helped pen the Dodd-Frank Act, recently appeared on CNBC to state 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, stating that 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.” Only bidders with existing banking charters will be allowed to review the bank’s financials before submitting an offer, per Reuters.
The FDIC said it will accept bids until Friday for Signature Bank, which it shuttered on Sunday, and Silicon Valley Bank, which it shut down on March 10. This will be the regulator’s second attempt to sell SVB after a failed auction on Sunday. The FDIC attempted to sell what remained 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. However, by the time Nasdaq halted trading on SBNY on March 10, its shares were trading for $70.
In summary, the FDIC has denied reports that Signature Bank buyers will have to stop doing business with crypto. The FDIC has said that it will accept bids until Friday for Signature Bank and Silicon Valley Bank.