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Signature Bank closure

Signature Bank’s Closure Is Political And A Strong Anti-Crypto Message, Ex-Congressman

Dalmas Ngetich by Dalmas Ngetich
3 months ago
in Crypto, Cryptocurrency Market News
Reading Time: 3 mins read

Barney Frank, the director of Signature bank and a former congressman who helped draft the Dodd-Frank Act, has stated that the lender is solvent and that there was “no real objective reason” for the bank to be closed. He said regulators wanted to send a strong anti-crypto message.

The Real Reasons Behind Signature Bank’s Closure?

The vague statement issued by the New York Department of Financial Services (NYDFS) on the closure of Signature Bank claimed the move was “in order to protect depositors.”

Compared to the detailed order passed by the California Department of Financial Protection and Innovation (DFPI) when they took over Silicon Valley Bank, citing inadequate liquidity and insolvency, the NYDFS statement regarding Signature Bank is vague and lacks any fact-finding order. The DFPI appointed the United States Federal Deposit Insurance Corporation (FDIC) as the receiver of Silicon Valley Bank (SVB).

Related Reading: U.S. Doesn’t Want To Get Entangled With The Silicon Valley Bank Collapse: Binance Boss

The transfer of SVB’s assets to the FDIC led to a temporary retracement of crypto assets, including Bitcoin. Meanwhile, USDC, the stablecoin issued by Circle, which had $3.3 billion stuck in the tech lender, de-pegged. But as of March 14, the stablecoin is trading at parity with the USD.

Bitcoin Price On March 14| Source: BTCUSDT On Binance, TradingView
Bitcoin Price On March 14| Source: BTCUSDT On Binance, TradingView

Industry participants have concluded that Signature Bank was shut down because of its pro-crypto stance and the fact that it was facilitating stablecoin liquidity using its Signet network. The government’s actions may have been prompted by the opportunity over the weekend from SVB’s failure. This is the third major bank with ties to crypto to collapse in less than a month.

Silvergate bank was shut down, then SVB went insolvent. With $110 billion in assets, Signature Bank went under due to a $10 billion bank run, though it had $88 billion deposits filing.

Silvergate is still solvent, despite an unprecedented 90 day $12 billion liquidation sparked by a corrupt sitting Senator who coordinated a bank run w/ short sellers.

Signature was healthy. NYDFS went rogue in shutting them down, and surprised even the FDIC.

It's targeted.

— Ryan Selkis 🥷 (@twobitidiot) March 13, 2023

Senator Elizabeth Warren Blames Trump As SEC Cracks Down On Crypto

Senator Elizabeth Warren has blamed the Trump administration for the closure of Silicon Valley Bank (SVB), which she claims was largely due to the rollback of critical parts of the Dodd-Frank Act in 2018. Warren has called for Congress, banking regulators, and the current administration to reverse these actions as an immediate priority.

Related Reading: Silicon Valley Bank Falls – Will US Interest Rates Drop To 3.75%?

The closure of Signature Bank might be a message that the industry is targeted. This comes when Bradley Garlinghouse, the Chief Executive Officer (CEO) of Ripple, a blockchain company, maintains that United States regulations don’t favor innovation, especially in crypto. 

The headwinds keep growing – with the SEC declaring war on crypto, Chair Gensler continues to harp that firms simply need to come in and register, but the truth is there’s no infrastructure in place for a “registered token” to trade nor any clarity as to what these tokens are.

— Brad Garlinghouse (@bgarlinghouse) March 7, 2023

Together with other executives, including Christian Larsen, Bradley was sued by the United States Securities and Exchange Commission (SEC). The regulator claims they sold unregistered securities in XRP during their initial coin offering where they raised over $1 billion.

Feature Image From Ed Jones/Agence France-Presse — Getty Images, Chart From TradingView
Tags: bitcoincirclesecSignature BankSilicon Valley Banksilvergate bankUSDC
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Dalmas Ngetich

Dalmas Ngetich

Dalmas is a crypto reporter covering NFTs, blockchain, DeFi, and blockchain news for NewsBTC. He’s part of a team of talented team working on bringing latest crypto development across the board. Dalmas is also the ex-founder of btc-pulse.com, a crypto news outlet. Dalmas has over 10 years of experience covering Forex, general finance, technology, and blockchain developments. His work and that of his partners has been featured in top news outlets including investing.com, CoinTelegraph, Entrepreneur, Forbes, and other authority sites. He’s passionate about technology and politics. When he’s not keeping tabs on crypto events, you’ll find him out in nature, exploring and traveling with family and friends. You can follow Dalmas on Twitter @Dalmas_Ngetich or ping him on Telegram @Dalmas_Ngetich

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