FDIC denies claims that it will require any potential purchaser of Signature Bank to relinquish cryptocurrency activities

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Federal Deposit Insurance Corporation

17th March 2023 – (New York) The Federal Deposit Insurance Corporation (FDIC) has denied claims that it will require any potential purchaser of Signature Bank to relinquish their cryptocurrency activities. Responding to a recent Reuters report that stated “any buyer of Signature must agree to give up all the crypto business at the bank”, the FDIC refuted the allegation, with an agency spokesperson reportedly denying it in an email to Reuters.

According to the FDIC’s resolution handbook, the acquirer will inform the agency of which assets and liabilities from the failed bank they are willing to take. Furthermore, the spokesperson referred CoinDesk to two joint statements published by the FDIC, Office of the Comptroller of the Currency, and the Federal Reserve. One of these statements affirms that banks are “neither prohibited nor discouraged” from offering services to any sector, including the cryptocurrency industry.

Reuters also reported that an FDIC spokesperson confirmed the agency would not mandate the divestment of cryptocurrency activities as part of any sale. Signature Bank was seized by the New York Department of Financial Services and transferred to the FDIC over the weekend. While Barney Frank, a board member at Signature Bank and co-author of the Dodd-Frank Act, suggested it was a political move, possibly motivated by an anti-cryptocurrency sentiment, a spokesperson from the New York regulator stated that they had lost confidence in the bank’s leadership after a bank run last Friday and a lack of “reliable” information over the weekend.

The FDIC is now seeking to auction both Signature Bank and Silicon Valley Bank, which was also seized by a state regulator last week.