Two unnamed sources told Reuters that Signature Bank will be auctioned off by the Federal Deposit Insurance Corporation (FDIC) and the potential buyer will be required to cease all cryptocurrency-related activity. If this information is true, it would confirm the suspicions that the FDIC took action against Signature Bank due to its involvement in the cryptocurrency industry. The FDIC also shut down Silicon Valley Bank recently.
Barney Frank, a prominent congressman and former Dodd-Frank Act contributor, claimed the decision to close the Signature Bank was a warning to the cryptocurrency industry. The New York State Department of Financial Services denied the claim, saying the decision to place the bank in receivership was due to its current condition and its ability to conduct business in a safe and sound manner.
Bidders interested in the bank will need to have existing bank charters to be able to review the bank’s financial data before submitting a bid. The FDIC will accept offers for Signature Bank and Silicon Valley Bank until tomorrow. In the event of no sale, the FDIC will review offers for individual parts of the banks.
Signature Bank was listed on the Nasdaq under the symbol SBNY in 2004, and in early 2022 its price had reached an all-time high of $365.71 per stock. The bank also offered an instant settlement network for digital payments, Signet, which rivaled a similar service at Silvergate Bank. By the time the Nasdaq halted trading on SBNY on March 10, its actions were trading at $70.
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