The government’s decision to seize Signature Bank is reportedly due to regulators losing faith in the management after the New York-based commercial bank lost 20% of its deposits on Friday, or approximately $17.8 billion.
According to Bloomberg, Signature was placed into receivership and taken over by the Federal Deposit Insurance Corporation (FDIC) because regulators are wary that the bank cannot continue to do safe and sound business after the massive outflows and pending withdrawal requests.
Says the New York Department of Financial Services (NYDFS),
“The bank failed to provide reliable and consistent data, creating a significant crisis of confidence in the bank’s leadership.
The decision to take possession of the bank and hand it over to the FDIC was based on the current status of the bank and its ability to do business in a safe and sound manner on Monday.”
The NYDFS says the decision has nothing to do with crypto amid accusations from former US congressman and Signature Bank board member Barney Frank that regulators targeted the bank because of its ties with digital assets.
Frank told CNBC in an interview that there was no indication of problems with Signature until the bank run on Friday that happened as a result of the Silicon Valley Bank implosion.
“I think part of what happened was that regulators wanted to send a very strong anti-crypto message. We became the poster boy because there was no insolvency based on the fundamentals.”Don't Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
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