“I think part of what happened was that regulators wanted to send a very strong anti-crypto message,” Frank told CNBC on Monday. “We became the poster boy because there was no insolvency based on the fundamentals.” But NYDFS denied Frank’s claims in a statement on Tuesday, saying that its decision to close Signature Bank on Sunday and appoint the Federal Deposit Insurance Corp as receiver “was based on the current status of the bank and its ability to do business in a safe and sound manner on Monday.” The FDIC and Signature Bank did not immediately respond to a request for comment.
“The decisions made over the weekend had nothing to do with crypto. Signature was a traditional commercial bank with a wide range of activities and customers,” an NYDFS spokesperson said.
“DFS has been facilitating well-regulated crypto activities for several years, and is a national model for regulating the space,” they said.
The spokesperson added that as withdrawal requests ballooned over the weekend, Signature Bank failed to provide reliable and consistent data. In response to NYDFS' statement, Frank said he was surprised the regulator said the decision to close the bank was not related to cryptocurrency.
“I think that was a factor," he said in an interview. "I’m puzzled as to why it was closed." He added that to his knowledge, bank executives were working to provide data to regulators.
"What we heard from our executives is that the deposit situation had stabilized and they would be getting the capital from the discount window and I continue to be convinced that if we had opened on Monday given the announcements of those two policies, we would have been in a reasonably good shape and certainly functional," he said.
Signature was a commercial bank with private client offices with nine national business lines including commercial real estate and digital asset banking. As of September, almost a quarter of its deposits came from the cryptocurrency sector, but the bank announced in December that it would shrink its crypto-related deposits by $8 billion. The FDIC established a "bridge" successor bank to Signature Bank on Sunday to enable depositors to access their funds. The U.S. Treasury Department and other bank regulators announced Sunday that all of the depositors at both Signature Bank and Silicon Valley Bank would be made whole and “no losses will be borne by the taxpayer.” <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Bruised U.S. bank stocks shake off initial SVB contagion fears Record FDIC cash draw for SVB may affect debt ceiling 'X date' Apollo, Blackstone and KKR eye SVB loan book - Bloomberg News U.S. Justice Department, SEC investigating Silicon Valley Bank collapse - WSJ U.S. Senator Warren: Fed's Powell should recuse himself from bank review First Republic shares dive on contagion fear, dragging U.S. regional banks SVB a casualty in 'battle between fire and ice' against inflation, bankers hear ANALYSIS-Some U.S. banks facing stock rout may need to seek partners ANALYSIS-Declining U.S. bank reserves add wrinkle to contentious debt ceiling issue ANALYSIS-SVB collapse unleashes Treasury volatility, whiplashing investors BREAKINGVIEWS-Bank woes make winners of money market villains BREAKINGVIEWS-Startup CEOs learn a lesson in counterparty risk GRAPHIC-SVB, Signature Bank are first bank failures since 2020 GRAPHIC-The path to the fall of Silicon Valley Bank ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Hannah Lang in Washington, Editing by Nick Zieminski)
