FDIC Denies Report Bank Buyer Must Divest Crypto

The Federal Deposit Insurance Corporation denied it would require any purchaser of Signature Bank to divest its crypto business.

The FDIC responded to a Reuters report Wednesday that said β€œany Signature purchaser must agree to give up all crypto activity with the bank,” citing two unnamed sources. A spokesman for the FDIC denied this to Reuters.

A spokesman for the FDIC said in an email that “the trusteeship does not end until all of the bank’s assets have been sold and all claims against the bank have been settled and the acquirer determines the terms of their offer.”

The acquirer will tell the FDIC “what assets and liabilities of the bankrupt bank it is willing to take over,” the spokesman said, citing the agency’s resolution manual. The spokesperson also referred CoinDesk to two joint statements published by the FDIC, Office of the Comptroller of the Currency and the Federal Reserve, one of which states that banks are “neither prohibited nor discouraged” from providing services to any industry.

Reuters reported that a spokesperson for the FDIC told the news service that “the agency would not require a divestment of any crypto business as part of a sale.”

Signature was seized this weekend by the New York Department of Financial Services and turned over to the FDIC. While Signature board member Barney Frank (of the Dodd-Frank Act) claimed it was a political move, possibly triggered by anti-crypto sentiment, a NYDFS spokesperson said in a statement that the regulator is losing confidence in the leadership of the bank had lost after a bank failed last Friday and a lack of “reliable” information over the weekend.

The FDIC now plans to auction off Signature and Silicon Valley Bank β€” another bank seized by a state regulator last week β€” potentially by the end of this week, Reuters reported.

UPDATE (March 17, 2023, 01:35 UTC): Clarifies the timeline, adds links.

Leave a Comment