The New York State Division of Monetary Providers (NYDFS) stated on March 14 that its closure of Signature Financial institution was not associated to the financial institution’s crypto trade ties.
NYDFS denies Signature was closed over crypto
Although Signature labored extensively with crypto companies, a consultant has denied that the NYDFS’ determination to close down Signature was associated to that exercise.
Statements cited by numerous retailers together with Fortune learn:
“The choices revamped the weekend had nothing to do with crypto…The choice to take possession of the financial institution and hand it over to the FDIC was based mostly on the present standing of the financial institution and its capability to do enterprise in a protected and sound method on Monday.”
Beforehand, Signature board member and former U.S. consultant Barney Frank made a number of statements suggesting that the financial institution’s closure was crypto-related. Frank alleged in a CNBC interview that Signature Financial institution was closed to “ship a robust anti-crypto message.”
Nevertheless, statements from the regulator answerable for Signature’s closure clearly refute the notion that willingness to work with crypto shoppers was a difficulty.
Signature fallout continues
The NYDFS initially closed Signature on Monday, March 13.
On the time of the financial institution’s closure, the FDIC took management of all deposits so as to present prospects with entry to insured deposits. Later, the Treasury and different regulators introduced a Biden administration-led emergency plan that can return all funds — not simply insured funds — to customers. This plan additionally applies to Silicon Valley Financial institution prospects.
The closure will possible pressure a number of companies to discover a new banking supplier. Coinbase was among the many crypto firms identified to retailer funds with the financial institution at instances, and about 30% of Signature’s deposits had been estimated to come back from crypto companies.
The closure of Signature Financial institution follows the collapse of Silicon Valley Financial institution on March 10 and Silvergate Financial institution’s determination to halt all operations on March 8.
Edit: An earlier model of this piece claimed that Circle saved funds with Signature Financial institution. Whereas Circle labored with Signature in 2021, it had no funds with the financial institution on the time of its closure.