The New York State Department of Financial Services (NYDFS) said March 14 that the closure of the undersigned bank has nothing to do with the bank’s ties to the cryptocurrency industry.
NYDFS denies signature was not encrypted
Signature has worked extensively with cryptocurrency companies, but representatives deny that the NYDFS’ decision to shut down Signature was related to that activity.
Statements quoted by various outlets including luck read:
“The decision made over the weekend had nothing to do with crypto…the decision to own the bank and turn it over to the FDIC was based on the bank’s current status and ability to do business in a safe and sound manner. It was on Monday.”
Earlier, signing committee member and former U.S. representative Bernie Frank made several statements suggesting the bank closure was crypto-related.Frank is CNBC interview Its signing bank was shut down to “send a strong anti-cryptographic message.”
However, the statement from the regulator responsible for closing the signature clearly refutes the notion that willingness to work with crypto clients was the problem.
Signature Fallout Continues
NYDFS originally closed Signature on Monday, March 13.
At the time the bank closed, the FDIC controlled all deposits and provided customers with access to insured deposits.The Treasury Department and other agencies have since emergency plan This will return all funds to the user, not just guaranteed funds. This plan also applies to Silicon Valley Bank customers.
The closure could force several businesses to seek out new banking providers. Coinbase is one of the crypto companies known to store funds in banks, and it was estimated that around 30% of signature deposits came from crypto companies.
Signature Bank’s closure follows the March 10 failure of Silicon Valley Bank and the March 8 Silvergate Bank decision to suspend all operations.
EDIT: A previous version of this article claimed that the Circle kept funds in signing banks. Circle chose to use 2021 Reserves Signedthere were no funds in the bank at the time of closing.
