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Signature Bank Was The Subject Of A Criminal Investigation Before Its Demise.

US authorities were probing into Signature Bank’s connections to Bitcoin when regulators swiftly seized the company last weekend. According to the report, US Justice Department investigators in Washington and Manhattan were looking into whether the now-defunct bank took the necessary precautions to identify any potential money laundering by its clients.Signature Bank investigated for criminal activities prior to collapse - Hindustan Times

In addition, the bank was under investigation by the Securities and Exchange Commission (SEC). The announcement follows an earlier statement by the New York banking authority that the collapse of Signature Bank was unrelated. demise of Silicon Valley Bank, which it described as “a serious crisis of trust in the bank’s leadership,” rather than cryptocurrency.

The United States Federal Deposit Insurance Corporation, which is now in charge of monitoring the lender, declined to comment on the story. The SEC, Justice Department, or Signature Bank did not immediately respond to a request for comments from Reuters.

Two days after the authorities shut down Silicon Valley Bank (SVB) due to a failure that left billions in funds unclaimed, On Sunday, state authorities closed the New York-based Signature Bank, making it the third-largest financial collapse in American history.  However, the bank declared in December 2017 that it would reduce such deposits by $8 billion.

One further cryptocurrency lender fails as Signature Bank closes

The third bank to close its doors in a week and the third worst bank collapse in American history, Signature Bank was immediately taken over by New York authorities . The decision to shutter the cryptocurrency-friendly bank, which offered loans to entrepreneurs, startled many. digital asset sector and enabled crypto-to-fiat transfers via its Signet network (including those who worked there. )

Barney Frank, the author of the Dodd-Frank Act and a current member of the Signature Bank board, said the bank’s shutdown was carried out to “send a very strong anti-crypto message,” it was said yesterday. In an email to Decrypt, the agency claimed that the decision had nothing to do with cryptocurrencies and that it”has been facilitating well-regulated crypto activity for some time and is a national model for the regulation of the area.     

Nevertheless, business insiders who talked with Decrypt says they don’t buy it and point to a developing pattern that dates back many months to several years. According to Caitlin Long, CEO and creator of crypto bank Custodia, “the de-banking of the crypto business has been happening since the beginning of the year. I believe what Barney Frank stated because he had no incentive to lie.

According to Sheila Warren, CEO of the Crypto Council for Innovation, recent regulatory pronouncements “appear to imply de facto limits on working with any cryptocurrency firms, regardless of their business models. 

Similar bans on banking services, according to Warren, “would signal that the United States is deciding to forego competing in the IT sector in favor of the uncontrolled sectors of the economy, in which other countries lead,” and would be a “watershed moment” for the United States “A paradigm shift in the way the United States approaches innovation and the issues at Signature Bank had been escalating for some time.

Last month, trading and investment business Statistica Capital filed a class-action lawsuit against the bank, saying that it had facilitated the activities of the now-defunct digital asset exchange FTX. The Nasdaq later stopped trading in the bank’s shares when crypto-friendly bank Silver gate announced its liquidation.

Nonetheless, the management of the bank was taken aback by the decision of the New York regulators to seize it. Especially after the big digital asset exchange FTX’s failure in November, regulators and politicians have been harshly cracking down on the world of digital assets recently.Feds were reportedly investigating Signature Bank before its seizure - MarketWatch

The U.S  In a letter to Federal Reserve Chairman Jerome Powell in December, lawmakers wanted information on American institutions’ involvement with cryptocurrencies. Democratic Senators Elizabeth Warren of Massachusetts and Tina Smith of Minnesota both expressly referred to Signature Bank and their caution regarding the linkages between conventional banks and cryptocurrencies, including Silvergate, which voluntarily stopped business last week.

Since then, banks with links to the cryptocurrency industry have encountered issues, notably Long’s Custodia, which was rejected as a member of the Federal Reserve System by the US Federal Reserve Board in January. Custodia is presently suing the Fed for its refusal. The trend I’ve witnessed is supported by it, long continued. Custodia was the initial attempt in what appears to be a wave of attempts to pull banks out of the business of banking on lawful digital assets.

Not just Long has that opinion. Nic Carter, a startup capitalist, said earlier this month that the American government is using the financial system to industry to “orchestrate a sophisticated, comprehensive campaign on the crypto industry” which he called “Operation Choke Point 2.0. Moreover, lawmakers have warned that the American government’s activities are reminiscent of the divisive Operation Choke Point program from the Obama administration, which prohibited banks from doing business with several firms.      

In a letter issued to the heads of the federal financial regulatory agencies, four Republican lawmakers only last week explained why they were putting pressure on reputable digital asset businesses. After the closure of the cryptocurrency-friendly bank Silver gate on March 8 and the subsequent closure of Signature A few days later, the world of traditional banking is once again closed off to cryptocurrency enterprises.     

If bitcoin is to be widely used, this issue is crucial: For its consumers to be able to purchase assets like Bitcoin and make payments in dollars by doing so, businesses like cryptocurrency exchanges seek relationships with traditional banks like Signature. 

As it “happened during the Numerous federal and state institutions have begun a comprehensive regulatory onslaught against cryptocurrencies,” according to Nisa Amoils, managing partner at A100x Ventures, the New York State Department of Financial Services decided to take action on Sunday.

Regulators were forced to act quickly in response to the enormous collapse of FTX, in part because so many American consumers lost money due to the exchange’s insolvency. The Federal Reserve’s chairman, Jerome Powell, said this week that banking institutions must “exercise tremendous caution” in their interactions with the digital asset sector. Signature Bank - Wikipedia  

US Closes ChipMixer Due to Fraud, And Signature Buyers Agree To Avoid Cryptos

On Wednesday, US authorities shut down the cryptocurrency business ChipMixer on claims of $3 billion in illegal transactions and money laundering. According to the US Justice Department, North Korean hackers used stolen data to access the site and provide ransomware organisations and dark net users access to steal $3 billion. 

Moreover, it is said that Russian military intelligence used the website to swap Bitcoins for hacking tools. German police have removed $46 million in cryptocurrency and the servers that were used to host the website in the interim as part of their investigation into the fraud.

According to US Attorney Jacqueline C. Romer of the Eastern District of Pennsylvania, investigators think ChipMixer enabled the laundering of Bitcoin and helped criminals avoid capture.

Prospective Signature Buyers Agree Not To Purchase Cryptocurrencies

Days after US authorities closed the bank due to severe rule violations, it is claimed that the possible purchasers of the Signature Bank have agreed to a condition that they would not engage in the cryptocurrency industry.The weekend failure of the New York-based bank came two days after Silicon Valley and Silvergate, two other sizable banks, went down.Regulators close crypto-focused Signature Bank, citing systemic risk

All three of the now-defunct institutions were regarded as “friendly” by cryptocurrency investors. The US Securities and Exchange Commission (SEC) and Department of Justice (DOJ) were looking into Signature Bank for money laundering since a quarter of its deposits come from customers who used cryptocurrency.

edited and proofread by nikita sharma

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