Bloomberg: Signature bank faces criminal investigation before collapse

Bloomberg: Signature bank faces criminal investigation before collapse
Bloomberg: Signature bank faces criminal investigation by U.S. authorities before bankruptcy
The U.S. Attorney's Office and the Securities and Exchange Commission were looking into the bank's work with cryptocurrency companies, specifically whether customer due diligence for possible money laundering was working well enough

Signature Bank faced a criminal investigation before it closed, Bloomberg reported, citing its sources. The U.S. Attorney's Office, the U.S. Department of Justice and the U.S. Securities and Exchange Commission (SEC) were looking into its work with cryptocurrency customers.

An agency spokesman recalled a statement SEC Chairman Gary Gensler made on March 12, when authorities shut down Signature.

The closure of Signature was announced late Sunday night, March 12. According to the regulators' announcement, the bank came under their control to protect depositors and the stability of the U.S. financial system. According to them, Signature was closed in part because it failed to provide "reliable and consistent data, which created a significant crisis of confidence in the bank's management."

All of Signature's deposits and virtually all of its assets went to Signature Bridge Bank NA, which is managed by the Federal Deposit Insurance Corporation (FDIC). The agency has already begun a search for a buyer, opening access to data that allows potential bidders to begin vetting the bank.

Signature's collapse followed the collapse of Silvergate Bank and Silicon Valley Bank (SVB), which also serviced cryptocurrency companies.

Signature lost 20 percent of its deposits March 10 as customers spooked by the collapse of SVB Financial Group's banking unit left for larger rivals, a source who asked to remain anonymous told the newspaper. He did not give exact figures, but based on the fact that the bank reported $89.2 billion in customer deposits as of March 8, journalists estimated the outflow of funds at about $17.8 billion.

At the same time, Signature Bank board member and former U.S. Congressman Barney Frank cited a figure of $10 billion. In addition, he claims that by March 12, the outflow of deposits had slowed and bank executives believed the situation had stabilized. According to him, there was no "real objective reason" for the authorities to close the bank; the point of the move was to send a "very strong anti-cryptocurrency signal" to people.

Bloomberg: Signature bank faces criminal investigation before collapse

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