When regulators abruptly seized the lender last weekend, U.S. prosecutors were looking into Signature Bank’s connections to cryptocurrency clients, according to Bloomberg News on Tuesday, which cited people familiar with the situation.
According to the article, U.S. Justice Department investigators in Washington and Manhattan were looking into whether the now-defunct bank took the required precautions to uncover suspected money laundering by its clients. The Securities and Exchange Commission (SEC) was also looking into the bank.
The news comes shortly after the New York financial regulator claimed earlier in the day that the closure of Signature Bank was not related to cryptocurrencies and was instead prompted by what it called “a significant crisis of confidence in the bank’s leadership” following Silicon Valley Bank’s failure.
The lender is now under the supervision of the United States Federal Deposit Insurance Corporation, which declined to comment on the report. A request for comments from Reuters was not immediately answered by the SEC, Justice Department, or Signature Bank.
Two days after authorities dissolved Silicon Valley Bank (SVB) in a collapse that left billions in savings unclaimed, state regulators shut down New York-based Signature Bank on Sunday, marking the third-largest failure in American banking history.
Almost a quarter of Signature Bank’s deposits as of September 2017 come from the cryptocurrency industry, but the bank declared in December 2017 that it will reduce those deposits by $8 billion.
