Signature Bank, a prominent U.S. commercial bank, recently made headlines after shutting down accounts related to cryptocurrency businesses. The move has sparked outrage among the crypto community, as it is seen as an attack on the legitimacy of cryptocurrency. The bank has faced criticism for its decision to align with traditional financial institutions and ignore the growing demand for digital currency. This scandal highlights the ongoing debate between the traditional banking system and the emerging fintech industry, as well as the challenges faced by those seeking to legitimize cryptocurrencies.
Over the past weekend, Signature Bank, a significant crypto-friendly institution, was closed down by regulators. The New York-based bank has a large lending business in the crypto industry and was caught in regulatory crossfire aimed at preventing a banking crisis from spreading. The US Federal Reserve stated that keeping the bank open could “threaten the stability of the entire financial system,” thereby ensuring that the crypto-friendly Signature Bank would have full access to their deposits, similar to what was done for depositors at the failed Silicon Valley Bank. After the sudden collapse of Silicon Valley Bank and the third-largest bank failure in US history, regulators moved against Siganture Bank, which some believe was an “anti-crypto message.” Investors, however, seem to be betting more on crypto assets than the traditional financial system, as the crisis shows no signs of easing.