The New York Division of Monetary Providers (NYDFS) shut down Signature Financial institution for “failing to supply constant and dependable knowledge” and never due to a bias in opposition to crypto, based on a March 14 report from the Worldwide Enterprise Occasions. Signature Financial institution Board Member Barney Frank had beforehand accused the regulatory company of shutting it down merely to “ship a really sturdy anti-crypto message.”
In keeping with the report, an NYDFS spokesperson mentioned that the shutdown had “nothing to do with crypto.” As an alternative, there was “a big disaster of confidence within the financial institution’s management.” The regulator was witnessing a deluge of withdrawals from the financial institution over the weekend, and when it tried to get data from the financial institution’s management, they failed to supply “dependable and constant knowledge,” the report mentioned in a paraphrase of the regulator’s assertion.
The report appeared to indicate that Barney Frank was standing by his unique declare. It quoted him as saying in response: “I feel that was an element. I am puzzled as to why it was closed,” and it said that Frank claimed “financial institution executives have been working to supply knowledge to regulators” however couldn’t accomplish this process earlier than it was closed down.
New York Banking Legislation Part 606 authorizes the NYDFS to take over a financial institution for quite a lot of causes, together with if the financial institution “Has refused, upon correct demand, to submit its data and affairs for inspection to an examiner of the division” or “Is in an unsound or unsafe situation to transact its enterprise.”
The NY DFS seized #SignatureBank underneath Part 606 of the New York Banking Legislation. This is the checklist of causes justifying seizure. They’re fairly wide-ranging. https://t.co/xY7TQVsltd. pic.twitter.com/zG5xv5FUFA
— Frances ‘Cassandra’ Coppola (@Frances_Coppola) March 14, 2023
Signature Financial institution was closed down on March 12. Its shuttering was a part of a wave of financial institution closures that had began the earlier week and that included Silvergate Capital and Silicon Valley Financial institution. Quite a few crypto-related companies had funds deposited at Signature, together with Coinbase, Celsius, and Paxos. Crypto trade Gemini had beforehand partnered with Signature, nevertheless it said on March 13 that it didn’t have any funds on the financial institution for the time being it was shut down.
