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