Signature Bank, a privately-held financial institution in the United States, is reportedly under investigation for money laundering activities prior to its sudden closure. According to sources, the bank’s managers are facing intense scrutiny from federal regulators over possible violations of anti-money laundering laws. The news underscores the growing concern over financial institutions’ involvement in illegal activities as regulators step up efforts to stop money laundering activities in the country. The bank’s closure leaves many questions unanswered about how it operated and the implications of the investigation on the wider financial sector.
Signature Bank is being investigated by the U.S. Department of Justice for potential shortcomings in its efforts to prevent money laundering, according to insiders cited in a Bloomberg report. The investigations are taking place in both Washington and Manhattan, which marks an important development for the New York-based financial institution. The DOJ is said to be particularly concerned about whether the bank is taking preventative efforts to screen account holders and track down illicit activity. Banks found to be involved in money laundering could face a range of penalties, including hefty fines, loss of banking licenses, and even criminal prosecution. The Federal Reserve announced that state regulators had closed Signature Bank, which had several cryptocurrency clients. Signature and its employees reportedly face no allegations of misconduct, but the impact the investigations had on New York state regulators’ decision to close the bank remains unknown.