Signature Bank board member cites signal to the cryptocurrency market as a reason for closure

Signature Bank board member cites signal to the cryptocurrency market as a reason for closure
Signature Bank board member Barney Frank cited the signal to the crypto market from the U.S. authorities as the reason for the bank's closure
Barney Frank said that the bank's management believed that its financial situation stabilized on March 12, but despite that Signature's top executives were promptly fired and the bank was closed without "real reason"

Signature Bank board member and former U.S. Congressman Barney Frank cited a signal to the crypto market from U.S. authorities as one reason for the bank's closure, CNBC reported. Regulators announced late Sunday night, March 12, that Signature was coming under their control to protect depositors and the stability of the U.S. financial system.

On March 10, Signature Bank customers, frightened by the sudden collapse of Silicon Valley Bank (SVB) and worried that uninsured deposits could be locked up or lose value, withdrew more than $10 billion from Signature, Frank told the publication in a telephone interview.

"There's also the panic factor." How the SVB bank collapse affected the crypto market

Signature executives have since explored "every opportunity" to bolster the bank's position, he said, including seeking additional capital and gauging interest from potential buyers. Frank said that by Sunday, deposit outflows had slowed, and executives thought the situation had stabilized.

Instead, Signature's top managers were summarily fired and the bank closed. According to Frank, there was "no real objective reason" for this.

"I think part of the point of the closure was that regulators wanted to send a very strong 'anti-cryptocurrency' message," the former congressman said.

The report notes that banks may limit certain services for cryptocurrency companies, such as brokerage services or the ability to transfer money to third parties.

Signature Bank board member cites signal to the cryptocurrency market as a reason for closure

Other news