• Silvergate Bank, one of the two main banks providing financial services to crypto platforms, collapsed leaving its clients to pivot to competitor Signature bank.
• U.S. authorities seized Signature Bank over the weekend citing liquidity issues due to their significant crypto exposure.
• The FDIC has now denied a Reuters report that any potential buyer of Signature Bank must agree to divest from crypto clients.
Signature Bank Seized By US Authorities
U.S. authorities decided over the weekend to place Signature Bank in receivership, informing its leadership mere hours before the public announcement was made. The bank had a high percentage of deposits coming from the crypto industry and this news dealt a blow to many mainstays of the industry, de-pegging Circle’s USDC and causing uncertainty for Coinbase and Paxos who had significant assets stored away at Signature Bank.
Buyers Must Be Existing Banks With Charter
The bank and its assets were put up for sale by U.S. authorities with the caveat that only potential buyers with an existing bank charter were allowed to take a peek at its financials. This led to both Royal Bank of Canada and PNC Financial Services ultimately deciding against a purchase in what seemed like an attempt by U.S authorities to protect those already invested in traditional banking structures from further competition from blockchain companies and digital asset investors alike..
FDIC Denies Any Limitations on Crypto Exposure
Reuters previously reported that any purchaser of Signature Bank must agree to divest from crypto clients but this statement was denied by FDIC who stated that no such limitation exists or is being proposed for any potential buyers or bidders interested in acquiring Signature Banks assets or liabilities going forward .
Crypto Industry Reacting To Uncertainty
This news has sparked debates across various social media platforms as well as raised questions about how blockchain startups are going to access traditional banking services going forward since bankers are skeptical about involving themselves with cryptocurrency related companies due to regulatory uncertainties and compliance risks .
The news concerning the seizure of Signature Banks has left many members of the crypto industry concerned but it is important they remain aware that no limitations have been set by FDIC in terms of divesting from existing crypto customers when buying out Signature Banks assets which will hopefully help allay some fears surrounding this issue going forward .