The New York-based bank’s weekend closure came two days after the collapse of another bank, California-based Silicon Valley Bank (SVB), and less than a week after the closure of another California bank, Silvergate Bank. All three of the now-defunct banks were known to be crypto-friendly financial institutions.
A class action lawsuit was filed against Signature Bank in February alleging that the bank knew about — and facilitated — the “now infamous FTX scam.” Specifically, the suit accuses Signature Bank of knowing and allowing “commingling 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 seized 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) has denied that crypto has anything to do with its decision to close Signature Bank, instead saying it was due to a “crisis of confidence” in the bank’s management.
Bids to acquire Signature Bank are due by Friday, March 17, according to Reuters.
The FDIC did not immediately return CoinDesk’s request for comment.