According to a March 14 report by the International Business Times, the New York State Department of Financial Services (NYDFS) closed Signature Bank because of “failure to provide consistent and reliable data,” not because of prejudice against cryptocurrencies. Signature Bank board member Barney Frank previously accused regulators of shutting it down just to "send a very strong anti-encryption message."
A spokesperson for the NYDFS reportedly said that the shutdown “has nothing to do with cryptocurrencies.” Instead, there was "a major crisis of confidence in the bank's leadership". The regulator, which witnessed massive bank withdrawals over the weekend, failed to provide "reliable and consistent data" when it tried to get information from bank leadership, the report said in a paraphrase of the regulator's statement.
The report seems to suggest that Barney Frank stands by his original claims. It quoted him as saying: "I think that's a factor. I'm confused as to why it closed," it said, adding that Frank claimed "bank executives were working to provide data to regulators" but couldn't do that before it closed task. Section 606 of the New York Banking Act authorizes NYDFS to seize banks for a variety of reasons, including if the bank "refuses to submit its records and transactions to the department's examiners for inspection upon appropriate conduct business under the circumstances.”
Signature Bank closed on March 12. Its closure is part of a wave of bank closures that began last week, including Silvergate Capital and Silicon Valley Bank. Many crypto-related businesses deposit funds with Signature, including Coinbase, Celsius, and Paxos. Cryptocurrency exchange Gemini had previously partnered with Signature, but it said on March 13 that it did not have any funds in the bank when it was shut down.
