A member of Signature Bank’s board of directors affirmed that the bank’s situation remained stable when there was a closing order from the US financial authorities.
On March 13 (US time), the financial regulators of the United States ordered the closure of Signature Bank, a commercial bank based in New York City, on the pretext of protecting depositors. and financial stability of this country.
With assets of $110 billion, Signature Bank became the third largest bank failure in US history, following Silicon Valley Bank two days earlier, which was also ordered by the government to close and confiscate 209 billion dollars in assets, making it the second largest bank failure in the United States.
Since 2018, when it started providing services to crypto companies in the US, Signature Bank has become one of the financial institutions that provide USD trading capabilities to many leading exchanges. Signature Bank has built a 24/7 remittance system for corporate crypto clients, and holds $16.5 billion in deposits from users of those companies.
Another bank that provides similar services to Signature Bank, Silvergate Bank, in early March also voluntarily announced the liquidation of assets and paid depositors after it was unable to meet financial reporting requirements to the SEC. , causing the stock price to sell off.
After the collapse of Signature and Silvergate, the question arises as to what service crypto companies and crypto exchanges will use to process USD transactions, which is seen as the lifeblood of connecting the financial industry. Traditional mainstream and investors come to the cryptocurrency market.
Even so, answering the interview CNBC, Signature Bank board member Mr. Barney Frank affirmed that the bank’s situation was stable at the time of intervention. However, Mr. Frank revealed that the bank had 10 billion USD withdrawn by depositors and businesses because of concerns that Silicon Valley Bank could create a knock-on effect, but the speed of withdrawals slowed down on Sunday and the situation was brought under control.
Not even trying to hide it… amazing
“I think part of what happened was that regulators wanted to send a very strong anti-crypto message,” said board member and former congressman Barney Frank.
— Erik Voorhees (@ErikVoorhees) March 13, 2023
However, New York authorities still decided to intervene in the bank, remove the leadership and are studying the possibility of selling the bank’s assets to repay the depositors.
Therefore, Mr. Barney Frank stated:
“I think part of what just happened was for the financial authorities to send a strong anti-crypto message. They want to show the public that crypto is harmful. We have become the face of the industry, and there is no signal of bankruptcy based on what we have now.”
This is a very remarkable statement if we go deeper into the background of Mr. Barney Frank. Accordingly, Mr. Frank was a member of the US Congress and Chairman of the Financial Services Committee of the US House of Representatives from 2007 to 2011. During this time, Mr. Frank drafted the Dodd-Frank Act, overhauled the entire US financial industry after the 2008 crisis, as well as giving more supervisory powers to US financial authorities.
The US Department of Justice and the SEC in the past 3 months have continuously taken legal actions against individuals and organizations involved in serious crashes in the cryptocurrency market in 2022, arguing that “proof securities” are frequently used, including: