An ex-congressman and the man behind the Dodd-Frank Act, Barney Frank, has said that Signature Bank was shuttered in part to attack the digital asset industry. The former lawmaker, who is also a Signature Bank board member, said that regulators targeted the bank to send an “anti-crypto message.”
Signature Bank’s closure marks the third-largest bank failure in U.S. history. Regulators have not yet provided any further reasoning for shuttering the bank. The closure of Signature Bank has raised concerns about the stability of the banking industry in the United States. It remains to be seen how this will impact other banks and their customers.
The move came after Silicon Valley Bank—to which a number of crypto companies had exposure—went belly up after suffering a $42 billion bank run days before. Former Rep. Barney Frank said that the crypto panic caused a run on deposits at Signature Bank, but he says that the bank had already stabilized before New York state regulators shut down the crypto-friendly institution.
Frank insists things had calmed by the end of the weekend. “They closed us, even though there was no good, compelling reason to do that, because they wanted to show that banks shouldn’t be involved in crypto,” Frank, a Democrat, said in a telephone interview. According to the New York Department of Financial Services, Signature had $110.36 billion in total assets and $88.59 billion in deposits as of December 31. “They called the bank on Sunday and said ‘We’re coming over.’”
The closure of Signature Bank has raised many questions about the future of crypto-friendly banks and their relationship with regulators. Some people see this as an attack on digital assets and the role they play in traditional banking systems, but others say it’s just another example of regulatory oversight being used within its limits. No matter how you feel about this issue, it is clear that this event will have big effects on both traditional banks and those who work in the digital asset space.