FDIC rejects report that Signature Bank buyer must give up crypto

FDIC rejects report that Signature Bank buyer must give up crypto

Editor’s note: This story has been updated to reflect the FDIC’s denial of Reuters’ report on Thursday.

The Federal Deposit Insurance Corporation has dismissed reports that potential buyers of Signature Bank must stop doing business with crypto.

The FDIC responded to one Reuters report citing two anonymous sources who claimed that the buyer of Signature Bank had to agree to give up all crypto operations at the bank. After publication, an FDIC spokesperson told the news service that it “would not require divestment of crypto activities as part of any sale,” pointing to earlier comments by Chairman Martin Gruenberg that the FDIC does not want to prohibit any particular activity by banks. .

Initial reports that the FDIC forced Signature Bank’s buyer to abandon crypto activities appeared to confirm suspicions that regulators were targeting the bank because it did business with the crypto industry — prompting a furious response from the industry in question.

Earlier this week, Barney Frank, an ex-congressman who helped write the Dodd-Frank Act, said: CNBC that banking regulators shut down the bank for sending “a very strong anti-crypto message.” Frank also served on the Signature Bank board of directors.

The New York Department of Financial Services was quick to reject his claim, saying in a statement that the decision to place Signature in the estate “was based on the current status of the bank and its ability to conduct business in a safe and sound manner .”

Only bidders with an existing bank charter will be allowed to review the bank’s finances before making an offer, according to Reuters.

The FDIC said it will accept bids through Friday for Signature Bank, which it closed on Sunday, and Silicon Valley Bank, which it shut down on March 10. For Silicon Valley Bank, or SVB, this will be the regulator’s second attempt to sell the institution after a failed auction on Sunday.

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The FDIC tried to sell what’s left of SVB over the weekend, but couldn’t find a buyer willing to buy the entire bank. The sources said Reuters that the FDIC would prefer to auction off both banks in their entirety, but would entertain bids for individual parts if unsuccessful.

Signature Bank shares began trading on the Nasdaq under the ticker SBNY in 2004. In early 2022, the stock price reached an all-time high of $365.71 per share.

The bank also offered an instant settlement network for digital payments, Signet, which was a rival to a similar service at Silvergate Bank.

When Nasdaq suspended trading on SBNY on March 10, the company’s shares were trading at $70.

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