The Federal Deposit Insurance Corporation (FDIC) has reportedly directed Signature Bank’s crypto clients to close their accounts by April 5th. The bank is well-known for catering to clients who trade digital assets and was one of the first institutions in 2018 to offer banking services to cryptocurrency exchanges.
The deposits in question were not part of a rescue deal arranged with Flagstar Bank, a unit of New York Community Bancorp, earlier this month.
The FDIC’s action is consistent with its strategy of closely monitoring banks with bitcoin exposure and ensuring they have sufficient risk management measures in place. The regulator has previously raised worries about the potential hazards linked with digital assets, including money laundering and terrorist financing, and has provided banks with instructions on how to handle these risks.
While it is unclear how many Signature Bank customers are affected by the injunction, the decision is likely to have a substantial impact on the bank’s business strategy, which has been centered on supporting the bitcoin industry. Signature Bank has not yet responded to the situation.
The FDIC’s decision to close cryptocurrency-related accounts at Signature Bank may be considered as part of a larger trend of increased regulatory scrutiny of the cryptocurrency business. As digital assets grow increasingly common, authorities throughout the world are wrestling with how to effectively regulate them and manage the risks connected with them.
Also read: FDIC to sell Signature Bank assets to New York Community Bancorp
