Barney Frank, a former congressman and a board member of Signature Bank, has accused regulators of shutting down the bank in part to undermine the digital asset industry. In a recent interview with CNBC, Frank claimed that regulators targeted Signature Bank to send an “anti-crypto message.”
This caused customers to withdraw over $10 billion in deposits, leading to the third-largest bank failure in U.S. history. Regulators stepped in to take over Signature Bank to protect depositors and the stability of the U.S. financial system. The sudden decision shocked Signature Bank’s executives, who were not prepared for the takeover. At the end of 2022, Signature Bank had 40 branches, $110.36 billion in assets, and $88.59 billion in deposits, according to regulatory filings.
The closure of Signature Bank, one of New York’s major financial institutions, has shocked the business world. It followed a massive run on the bank triggered by the collapse of Silicon Valley Bank, which had significant exposure to crypto companies.
“I think part of what happened was that regulators wanted to send a very strong anti-crypto message,” as said during a CNBC interview by Barney Frank, a board member of Signature Bank and a former congressman.
CNBC Interview
How is Silvergate is connected to crypto which regulators and big banks may have not liked ?
Silvergate Bank, another crypto-friendly bank, also announced its winding down operations in the same week. According to former congressman Barney Frank, a board member of Signature Bank and the architect behind the Dodd-Frank Act, regulators targeted the bank to send an “anti-crypto message.” Signature Bank’s decision to lend to crypto companies like Coinbase and Paxos made it a “poster boy” for the industry. Now, with Signature Bank gone, crypto companies are once again locked out of the traditional finance system, creating significant obstacles for those who wish to buy, sell or trade crypto-assets.
Conclusion
With potential anti-crypto standing of the regulators in the United States, companies will have to find countries which are more friendly to crypto innovation. If regulators and big banks can go this extent with Silvergate shutdown, days are not far away where crypto innovators will start moving out of the United States for good. In this article from today we also explained why the Banking Crisis is Driving US Crypto Firms to Seek Safe Haven in Switzerland and Beyond.
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Suggested Reading :
- Hong Kong plans to make crypto purchase and trading legal for all of its citizens
- Crypto Industry is Under Siege by Regulators
- Why is Dubai an Attractive Crypto Oasis?
- SEC Cracks Down on Binance.US for Operating as Unregistered Securities Exchange: Will Cryptocurrency Survive Regulatory Onslaught?
- Federal Reserve Chairman Jerome Powell’s Bold Endorsement: Proper Regulation Could Unlock Stablecoins’ – Potential in Financial Sector
- Silvergate – Cryptocurrency-focused Bank is in a Pickle
