The New York-based bank’s weekend shutdown came two days after the collapse of another bank, California-based Silicon Valley Bank (SVB), and less than a week after the closing of another California-based bank, Silvergate Bank. All three now-defunct banks were known as crypto-friendly financial institutions.
In February, a class action lawsuit was filed against Signature Bank alleging that the bank knew about – and facilitated – the “now infamous FTX fraud.” Specifically, the lawsuit accuses Signature Bank of having knowledge of and permitting “the mixing of FTX customer funds within its proprietary blockchain-based payment network, Signet.”
Barney Frank, a Signature Bank board member and former Democratic congressman who co-authored the Dodd-Frank Act, also suggested the takeover was spurred by an anti-crypto motive, telling CNBC that Signature Bank was solvent — and that regulators intervened anyway to get a message.
“I think part of what happened was regulators wanted to send a very strong anti-crypto message,” Frank told CNBC.
However, the New York Department of Financial Services (NYDFS) has denied that crypto had anything to do with its decision to close Signature Bank, saying it was due to a “crisis of confidence” in the bank’s leadership.
Bids to acquire Signature Bank must be submitted by Friday, March 17, according to Reuters.
The FDIC did not immediately return CoinDesk’s request for comment.