US bank regulators are reportedly requesting that any institution interested in buying Signature Bank give up all crypto business, further isolating the digital asset markets from traditional banking. However, the Federal Deposit Insurance Corporation (FDIC) official has challenged this and said it would not require “divestment of crypto activities as part of any sale.”
Signature Bank, alongside Silvergate and Silicon Valley Bank (SVB), was one of the three crypto-friendly banks that offered crucial infrastructure for crypto businesses. The demise of these banks has prompted firms in the sector to look beyond the US for alternatives.
According to reports, financial institutions interested in acquiring Silicon Valley Bank and Signature Bank have until the end of the week to submit their bids. The FDIC has been criticized for allegedly attempting to choke off digital assets by limiting banking activities such as offering crypto firms banking services.
Also Read: Signature Bank closure not related to crypto, says NY regulator
On March 14, a Republican congressman and a former bank regulator with deep crypto industry ties accused the FDIC of using the current crisis to “choke off digital assets.” Rep. Tom Emmer questioned FDIC Chairman Martin Gruenberg on whether the agency had instructed banks not to provide banking services to crypto firms.
In response to the congressman’s inquiry, Brian Brooks, a former Coinbase executive who served as acting Comptroller of the Currency during the Trump administration, also said “it’s pretty clear there has been a decision across the bank regulatory agencies… that crypto is inherently risky and needs to be extricated from the banking system.”
