According to recent reports, Barney Frank, a former member of the United States House of Representatives, has indicated that New York authorities shuttered the cryptocurrency-friendly Signature Bank as part of a display of force. In an interview that took place on Monday with CNBC, a former legislator who now serves on the board of Signature Bank claimed that authorities had their sights set on the bank in order to convey a “anti-crypto message.”
The management of the company was taken aback when New York authorities made the unexpected decision to suddenly close down crypto-friendly Signature Bank on Sunday, claiming a danger to the system. This is the third-largest bank that has failed in the history of the United States. The authorities in charge of financial regulation have not offered any additional justifications for closing down the bank as of yet.
The decision occurred after Silicon Valley Bank, to which a number of cryptocurrency businesses had exposure, went belly up after experiencing a bank run of $42 billion several days earlier. During the same week, crypto-friendly Silvergate announced that it would be closing down its activities.
According to a report that was published on CNBC on March 13, Frank, who is also a board member of Signature Bank, stated that the only indication of problems at the bank was a deposit run of more than $10 billion on March 10, which he described as “purely contagion” from the fallout of Silicon Valley Bank. On March 12, the New York Department of Financial Services was given authority of Signature, and on that same day, they designated the Federal Deposit Insurance Corporation of the United States to manage the insurance procedure.
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.
Barney Frank said
Because of the closure of Signature Bank, mainstream cryptocurrency companies are once again locked out of the traditional finance system. This is something that crypto exchanges in particular need in order to provide their customers with the ability to buy assets like Bitcoin and cash out in U.S. dollars.
