Former Democratic congressman from Massachusetts Barney Frank suspects Signature Bank may have been taken over by regulators to send an “anti-crypto message.”
The New York State Department of Financial Services shuttered Signature on Sunday after customers withdrew $10 billion worth of deposits on Friday.
The state regulator appointed the Federal Deposit Insurance Corporation (FDIC) to run a “bridge bank” holding all of Signature’s assets.
The FDIC plans to market the financial institution to potential bidders and says it will protect all of Signature’s depositors, noting that the bank’s customers all still have access to their money.
Frank, who is also a Signature board member tells CNBC that the bank’s issues were “purely contagion” from the implosion of Silicon Valley Bank last week.
Frank also claims there was “no real objective reason” regulators needed to take over the crypto-friendly financial institution.
“I think part of what happened was that regulators wanted to send a very strong anti-crypto message. We became the poster boy because there was no insolvency based on the fundamentals.”
Over the weekend, the Federal Reserve and Treasury Department announced they would make up to $25 billion available as loans for financial institutions to alleviate liquidity pressures and meet the needs of their depositors.
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