Bloomberg has reported that Signature Bank was the subject of a US criminal probe prior to its closing. Specifically, the financial institution was probed by both the US Securities and Exchange Commission (SEC), and Justice Department for its anti-money-laundering processes.
Signature Bank was closed this past Sunday, following the Federal Reserve announcement for aid for depositors affected by the Silicon Valley Bank failure. Conversely, the US criminal probe into Signature Bank regarded its dealings with crypto clients specifically.
Signature Bank Probed Prior to Closing
This past week saw some of the biggest collapses the financial sector has seen in years. Specifically, the closing of Silicon Valley Bank set two of the largest bank failures since the financial crisis of 2008. Now, news has come to light that one of those banks was the subject of a criminal probe.
Bloomberg has reported that Signature Bank was the subject of a US criminal probe prior to its closing. Moreover, the Justice Department and SEC were investigating “whether the New York Bank took sufficient steps to detect potential money laundering by clients,” according to the report.
The closing of Signature Bank was rather surprising for many in the industry. Arriving within the announcement that Silicon Valley Bank depositors would be aided by the Federal Reserve, the closure of Signature by New York Regulators was something not many expected.
Conversely, it is interesting to note that the investigation was centered around the bank’s deals with its crypto clients. Consequently, one of the banks’ board members, Barney Frank, noted their belief that the shutdown showcased clear “anti-crypto messages,” to the sector.