Buyer of Signature bank will not be barred from crypto business
The Federal Deposit Insurance Corporation (FDIC) will not bar the buyer of Signature Bank from crypto-businesses
The Federal Deposit Insurance Corporation has denied a report that companies wishing to buy a bank that went bankrupt would have to give up the cryptocurrency part of the business
The Federal Deposit Insurance Corporation (FDIC) denied a Reuters report that the buyer of Signature Bank would have to give up cryptocurrency companies. On March 16, the news outlet reported a "cryptocurrency condition" for bidders to acquire the bankrupt bank, but the report was later updated with comments from the regulator.
The article originally stated, citing two unnamed sources, that "any Signature buyer must agree to give up all of the bank's cryptocurrency business." An FDIC spokesman told the publication after the news broke that the agency would not require divestiture of the cryptocurrency business as part of any deal to sell the bank's assets. He also pointed to previous comments by FDIC Chairman Martin Gruenberg that the agency does not seek to ban any specific bank activities.
The closure of Signature Bank followed the collapse of Silvergate and Silicon Valley Bank (SVB). On March 12, U.S. regulators announced that Signature had come under their control because it had failed to provide "reliable and consistent data, creating a significant crisis of confidence in the bank's management." Signature Bank's asset management was transferred to the FDIC. The agency intends to sell the bank's business in whole or in part and is accepting bids from interested companies until March 17.
At the end of September of last year, nearly a quarter of Signature's deposits was in the cryptocurrency sector. After the bank closed, Signature board member Barney Frank said that the authorities had "no real objective reason" for closing the bank, and the point of the move was to send people a "very strong anti-cryptocurrency message."
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