A representative from the New York State Department of Financial Services said on Tuesday that the closure of Signature Bank, the third US financial institution to fail in days, had “nothing to do with cryptocurrency,” according to Reuters. On Tuesday evening, Bloomberg reported that federal authorities were reviewing the bank’s interactions with Bitcoin customers even before it went out of business, suggesting that may not be the case.
Signature Bank under criminal investigation ahead of collapse – Bloomberg News https://t.co/kvKU2ezNBg pic.twitter.com/SITkVE1UFZ
— Reuters (@Reuters) March 15, 2023
According to sources, DOJ investigators are also examining the extent to which Signature monitored potential money laundering schemes, including the thoroughness with which it screened applicants for new accounts and tracked transactions that triggered warning signals. ‘alarm.
Related: Democrats face backlash over FTX scandal, return millions in donations
SEC investigation
According to sources, the Securities and Exchange Commission is conducting its own investigation. It’s unclear when the investigation began or if it had any bearing on the NYSDFS’s decision to close the bank over the weekend.
Neither Signature Bank nor the FDIC, which is currently in the bank’s possession and looking for a buyer, has yet responded to the Bloomberg report.
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New York regulators just said the bank’s failure to provide “reliable and consistent data” caused them to lose faith in Signature.
The SEC is also silent: Chairman Gary Gensler just said his office would “review and take enforcement action” if it finds violations of federal securities laws on Sunday.
Related: Support grows for new currency giving the feds ‘full control’ of all transactions
Alarm bells for crypto
Authorities have been sounding the alarm bells on cryptocurrencies for some time, warning banks to be more vigilant in observing crypto transactions and that digital money presents a chance for illegal behavior.
While federal investigators are also looking into the sale of shares by Silicon Valley Bank executives in the days leading up to its own collapse – the largest bank failure since the 2008 financial crisis, according to Fox News – investigators Feds also focus on Silvergate Capital Corporation, which specialized in crypto clients and its work with defunct FTX exchange.
Silicon Valley Bank, known as SVB, is the biggest bank failure since the height of the 2008 financial crisis. https://t.co/SJK30JugU9
— FOX 4 NEWS (@FOX4) March 11, 2023
Signature isn’t the only bank that has recently been shut down and is coming under intense scrutiny.
Related: Will taxpayers be required to bail out banks?
Reprinted with permission. See this story and more at WayneDupree.com.
