FDIC Rejects Signature Bank Buyers’ Plan to Halt Crypto Operations

ByGavin Cole

Mar 17, 2023
Financial planning

The Federal Deposit Insurance Corporation (FDIC) purportedly said that it would not honor a request from Signature Bank’s buyer for the bank to cease all of its cryptocurrency activities.

In response to a story from Reuters that said the buyer of Signature would be required to agree to give up all cryptocurrency activities at the bank, the FDIC categorically refuted that this was the case.

Claim acknowledgment, buyer’s decision

In an email, an FDIC spokesperson said that the receivership doesn’t end until all the bank assets are sold, and the claims made against the bank are acknowledged. Also, the acquirer must decide the conditions of their bid. 

The representative for the purchaser said that the FDIC would be informed about the assets and liabilities that the acquirer intends to take from the insolvent bank. In addition, the spokesperson talked about two joint statements that the FDIC released together with the Office of the Comptroller of the Currency and the Federal Reserve. In one of the two states, it is against the law for banks to provide services to any other industry.

According to Reuters, a spokeswoman for the FDIC informed the news agency that the organization would not require the divestiture of cryptocurrency activity as part of any sale.

Signature bank’s political seizure sparks crypto debate

On Friday, the FDIC took possession of Signature after the New York Department of Financial Services had seized it. Barney Frank, a member of the board of Signature, said the decision was motivated by anti-crypto sentiment and purely political reasons. In contrast, a spokeswoman for the NYDFS noted that the regulator lacked trust in the bank’s leadership after a bank run last Friday and lacked pertinent facts.

The Federal Deposit Insurance Corporation (FDIC) looks forward to the Signature and Silicon Valley Bank auction, which will most likely occur before this week’s end.

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