Banks Offering Bids for Signature Bank Must Give Up Crypto Business

Sources have said that those who acquire Signature Bank must drop the latter’s crypto business, according to Reuters. The deadline for the bids is March 17.

Reuters reports are emerging that people close to the matter concerning the bids for Signature Bank and Silicon Valley Bank can make their bids by March 17.

The sources said that the regulators asked those interested in acquiring the banks must submit their bids by that deadline.

Perhaps most interestingly, those who acquire the banks must “give up all the crypto business” at Signature. United States authorities have expressed their displeasure with the effects of crypto businesses at banks, citing systemic risks.

The U.S. Federal Deposit Insurance Corp has been making a strong effort to see that the banking situation is resolved. It attempted to have SVB sold on Sunday but failed. It is now trying to have both of these fallen banks sold quickly — partial sales of the banks may see approval if a full sale does not take place.

The sources also said that the goal is to give traditional lenders advantages over private equity firms. The authorities are facilitating this by limiting access to the banks’ financials to only bidders with an existing bank charter. As a result, these bidders can study the financials before submitting their offer.

Signature Bank Facing Criminal Probe

Signature Bank is facing a criminal probe from investigators in the Justice Department in Washington and Manhattan. They are examining if the bank “took sufficient steps to detect potential money laundering by clients,” according to recent reports. According to the outlet’s sources, the United States Securities and Exchange Commission is also investigating the bank.

The specific actions that are under the scanner include “scrutinizing people opening accounts and monitoring transactions for signs of criminality.” In any case, it’s a troubling development for the bank. This comes after several notable events have transpired in the past few days.

Banks Under Watch

Among the developments concerning Signature, a report surfaced last month that the bank knew about FTX’s dealings since June 2020. On a general level, analysts are wondering if there is a clampdown on crypto-friendly banks.

A board member of the bank asserted that the shutdown was politically motivated. Meanwhile, New York regulators maintained that Signature Bank’s closure was unrelated to its involvement in the cryptocurrency sector.