NY regulators say Signature Financial institution closure unrelated to cryptocurrency

The New York State Division of Monetary Companies (NYDFS) mentioned on March 14 that its closure of Signature Financial institution was not associated to the financial institution’s crypto trade ties.

NYDFS denies Signature was closed over crypto

Although Signature labored extensively with crypto companies, a consultant has denied that the NYDFS’ resolution to close down Signature was associated to that exercise.

Statements cited by numerous shops together with Fortune learn:

“The selections revamped the weekend had nothing to do with crypto…The choice to take possession of the financial institution and hand it over to the FDIC was based mostly on the present standing of the financial institution and its capability to do enterprise in a secure and sound method on Monday.”

Beforehand, Signature board member and former U.S. consultant Barney Frank made a number of statements suggesting that the financial institution’s closure was crypto-related. Frank alleged in a CNBC interview that Signature Financial institution was closed to “ship a powerful anti-crypto message.”

Nevertheless, statements from the regulator liable for Signature’s closure clearly refute the notion that willingness to work with crypto shoppers was a difficulty.

Signature fallout continues

The NYDFS initially closed Signature on Monday, March 13.

On the time of the financial institution’s closure, the FDIC took management of all deposits to be able to present prospects with entry to insured deposits. Later, the Treasury and different businesses introduced a Biden administration-led emergency plan that may return all funds ⁠— not simply insured funds ⁠— to customers. This plan additionally applies to Silicon Valley Financial institution prospects.

The closure will seemingly pressure a number of companies to discover a new banking supplier. Coinbase was among the many crypto firms identified to retailer funds with the financial institution, and about 30% of Signature’s deposits have been estimated to come back from crypto companies.

The closure of Signature Financial institution follows the collapse of Silicon Valley Financial institution on March 10 and Silvergate Financial institution’s resolution to halt all operations on March 8.

Edit: An earlier model of this piece claimed that Circle saved funds with Signature Financial institution. Whereas Circle selected to make use of Signature for its reserve deposits in 2021, it had no funds with the financial institution on the time of its closure.