As reported by CriptoFácil, Reuters claimed the Federal Deposit Insurance Corporation (FDIC) would have prohibited the acquirer of Signature Bank from working with cryptocurrencies. However, an FDIC spokesperson denied the information and said the agency did not restrict the bank’s activities.
According to Reuters, two FDIC-linked sources stated that “any buyer of Signature must agree to give up all of the bank’s cryptocurrency business.” This Friday (17), the spokesperson denied the statement.
At the same time, the FDIC spokesperson stated that the Signature liquidation is still ongoing. The process involves negotiations by both parties and joint negotiation. Therefore, the FDIC does not intend to impose any rules beforehand.
Buyer’s Choice
In the statement, the spokesperson said the FDIC will not order the closure of any division of the bank. This will be up to the acquirer, who will say “which assets and liabilities of the bankrupt bank is willing to assume”.
That is, there is the possibility that a buyer wants the bank’s startup portfolio, but does not want the cryptocurrency division. Or the customer just wants the cryptocurrency division. In that sense, Signature could be sold in parts and not in full.
In addition, the spokesperson issued two joint statements published by the FDIC, the Office of the Control of the Currency (OCC) and the Federal Reserve (Fed). One of the statements states that regulators “do not prohibit or discourage” banks from providing services to any sector.
Speculation and political movement
Barney Frank, a Signature board member, criticized the Reuters statement and claimed it was a political move. According to Frank, the statement is intended to cement an “anti-crypto sentiment” in the market.
On the other hand, a spokesperson for the financial regulator of New York (NYDFS) also spoke out. In a statement, the spokesperson stated that the NYDFS has lost confidence in Signature’s leadership.
Last Friday (10), regulators determined the total liquidation of the bank and its assets. The process took place without warning near the weekend, which caused severe turmoil in cryptocurrencies. The stock market collapsed on Monday (13) because of the episode.
The NYDFS also criticized the lack of “reliable” information over the weekend, given the speed of the sell-off.
Now, the FDIC is now looking to auction off both the Signature and the SVB. According to Reuters, the process should take place by the end of the week, but as of this writing, regulators have not been able to find any buyers interested in the banks.
