Signature Bank Laundered Millions Before Failing – Cryptopolitan

The sudden collapse of Signature Bank sent shockwaves across the financial industry. It became apparent that U.S. regulators were investigating the bank’s transactions with cryptocurrency clients ahead of the weekend seizure.

The Justice Department and the Securities and Exchange Commission are investigating whether the New York-based bank did enough to prevent potential money laundering by vetting account openings and monitoring transactions for signs of crime, the sources familiar with the matter said on condition of anonymity.

Investigation into alleged misconduct at Signature Bank

Known for its crypto-friendly approach, Signature Bank lends money to companies in the Crypto asset space and facilitates crypto-to-fiat transactions through its Signet network.

Still, its alleged misconduct had been under investigation before its abrupt closure, making it the third bank to fail in a week and the third largest in U.S. history.

Despite the investigation, Signature Bank, its employees and executives have not been accused of any wrongdoing. A class-action lawsuit has been filed against the bank and its former executives, alleging that the bank was in good financial condition in the days leading up to its closure.

Regulator Denies Banks Access to Crypto Firms

Industry insiders say the closure of Signature Bank is part of a trend of regulators denying banks access to cryptocurrency companies.

While the New York Department of Financial Services has denied that the decision to close the bank had anything to do with cryptocurrencies, insiders point to the regulator’s recent statement suggesting a de facto ban on dealing with all cryptocurrency companies.

The closure of Signature Bank came as a surprise to many, including those who worked there. Its cryptocurrency-friendly approach has earned it a reputation as a leader in the space.

However, the investigation and subsequent closure highlighted the challenges cryptocurrency firms face in accessing traditional financial services.

It is unclear when the investigations began and what impact, if any, they had on New York state regulators’ recent decision to close the bank.

Despite the uncertainty, the closure of Signature Bank sends a clear message that regulators are paying close attention to cryptocurrency-related activity and are willing to take action if they believe there is a risk of money laundering or other financial crimes.

The closure of Signature Bank has raised concerns about cryptocurrency firms’ access to traditional financial services. Whether other banks will follow Signature Bank’s fate remains to be seen, but it is clear that regulators are closely scrutinizing the industry and willing to act if necessary.

Source of information: Compiled from CRYPTOPOLITAN by 0x Information.The copyright belongs to the author Jai Hamid, and shall not be reproduced without permission

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