Throughout the narrative of the Signature Bank issue, the Fed emphasised their position even more strongly in light of the continued complaints of the administration’s “anti-crypto” mentality. One of the top three banks was closed down by the Feds on Sunday on the pretext of “systemic risk” in order to stop the losses and prevent a huge catastrophe.
Some bankrupt U.S. banks may need to be saved, but the Federal Deposit Insurance Corporation (FDIC) of the United States has reportedly asked potential rescuers to forgo backing any cryptocurrency services. It is becoming more difficult for the bank to recover as a result of reports about continuing investigations into careless oversight that permitted financial wrongdoing.
The Federal authorities have invited banks considering the acquisition of failed U.S. companies like Silicon Valley Bank and Signature Bank to submit their offers by March 17. The regulators want to sell SVB and Signature’s whole businesses, but they may potentially consider offers for just a portion of the banks.
The US and acting Comptroller of the Currency have expressed reservations about the three banks’ failure and suspension as a possible attempt by the government to isolate the cryptocurrency industry from the financial world.
According to sources, the regulator would favour traditional lenders over private equity firms and would only take bids from organisations that currently hold an active bank licence.
“I think part of what happened was that regulators wanted to send out a very strong anti-crypto message,” said former Democratic congressman, Signature Bank committee member, and co-author Barney Frank. While asserting that Signature Bank was stable and that authorities nevertheless interfered to convey their objective, he thought the seizure was driven by an anti-crypto mentality.
In a letter to the FDIC, U.S. Representative Tom Emmer expresses concern that the federal government is using issues in the banking industry as “weapons” to attack cryptocurrencies. Notwithstanding allegations that regulators are anti-crypto, the authorities continue to refute these assertions and blame all of these moves on their lack of confidence in the bank’s management.
Image Credits: REUTERS/David ‘Dee’ Delgado/File Photo123
