Signature Bank Buyers Would Have To Give Up All Crypto…
Amid the instability in the US banking sector, the United States Federal Deposit Insurance Corporation (FDIC) has reportedly now made a decision against the crypto industry. According to a report published on Wednesday evening, potential buyers of the crypto-friendly Signature bank can now submit their bids but with a major condition.
The report said buyers of the Signature banks are to submit their bids by March 17 and would have to give up all crypto businesses at the bank. This has raised controversy among the crypto community on how the US regulators are keen on disrupting the industry.
Another Major Crackdwon For Crypto?
Signature Bank which was one of the few US banks spreading its services across the crypto sector was shuttered by the state regulators on Sunday. Though the regulators claim this move had nothing to do with targeting crypto, the community has continued to stand on the fact that it indeed was a plan to prey on crypto instability.
Related Reading: The “Big Scandal” Behind Pro-Crypto Signature Bank Shutdown By Regulators
Signature Bank had a quarter of its deposits accounted to crypto firms and the bank provided financial services to crypto companies, especially with its real-time payment processor Signet, which firms such as USDC issuer Circle used in processing transactions after business hours.
The bank was recently shut down by US regulators and probed for potentially lax monitoring that may have resulted in money laundering. In February, the regulators filed a class action lawsuit against Signature Bank, alleging that the bank knew about and facilitated the FTX propitiated fraud.
These moves by the US regulators have made the crypto community more convinced in their realization that the regulators were never on the side of crypto but instead have always been against it.
Many in the industry have now speculated that the closure of Signature Bank and the two other crypto-friendly banks Silvergate and Silicon Valley Bank was used as a weapon to lay off crypto businesses from the traditional banking systems.
According to U.S. Representative Tom Emmer in a letter sent to the FDIC, the federal government is weaponizing recent instability in the banking sector to attack crypto. Barney Frank, a Signature Bank board member, and former Democratic congressman noted that the regulator’s recent actions are all based on an anti-crypto motive.
Frank told CNBC that Signature bank was solvent and the regulators are sending a “very strong anti-crypto message.” However, the New York Department of Financial Services (NYDFS) denied saying its decision to shutter Signature Bank was due to a “crisis of confidence” in the bank’s leadership.
Crypto To Continue Movement Regardless
While the U.S. regulator moves to sell Signature Bank and prevent buyers from continuing its services to crypto businesses would end Signature’s Signet platform access to crypto firms, a Coinbase spokesperson told Fortune that crypto would still move on regardless.
The spokesperson noted, “As we saw over the weekend, crypto is resilient and we would absorb this and move on just as we have in other events.” They further added that there would be “other players to fill the void.”
Meanwhile, the crypto market has continued to maintain composure amid the banking crisis with Bitcoin (BTC) and other altcoins still in green after a slight retracement this morning. So far, the global crypto market cap is still valued above $1 trillion, down by only 0.7% in the last 24 hours.
Featured image from Unsplash, Chart from TradingView