The US government and the Federal Deposit Insurance Corporation (FDIC) are auctioning off two bankrupt US financial institutions, Silicon Valley Bank (SVB) and Signature Bank (SNBY), this week with bids expected by March 17. Matter said the qualifications to buy banks are strict and apparently buyers can no longer deal with crypto firms.
Controversy Surrounds Alleged Crypto Restrictions For Potential Bank Buyers
Last week, the second and third largest bank failures in the United States occurred within 48 hours of each other, and both financial institutions are sold this week. Anonymous sources familiar with the subject told Reuters that the FDIC is accepting bids for Silicon Valley Bank (SVB) and Signature Bank (SNBY), with final bids expected on Friday, March 17, 2023. The FDIC has already attempted to auction off SVB this past weekend, but no deal did not materialize, and the US government offered a bailout package for depositors at both banks.
Sources revealed that the FDIC is using investment bank Piper Sandler Companies to manage the two banks’ auctions. The sources added that the FDIC hopes to sell both SVB and SNBY in their entirety, but partial offers on specific bank branches and verticals will be considered. To buy the two financial institutions, strict rules apply, as only an existing chartered bank can submit an offer. Reuters contributors David French and Pete Schroeder were told the program was designed to give traditional lenders “an edge” over private equity firms.
Journalists were also told that bidders should not go to cryptocurrency firms if they want to acquire SVB and SNBY. “Any purchaser of Signature must agree to relinquish all crypto activities of the bank, the two sources added,” French and Schroeder’s report detailed. Reuters’ account of the situation, from unnamed sources, contradicts the statement made by the New York State Department of Financial Services.
The New York regulator insisted that the recent bank closings had “nothing to do with crypto”. The regulator made the statement after Barney Frank, a member of the board of directors of Signature Bank and former member of the United States House of Representatives from Massachusetts, said he suspected the shutdown was an “anti- crypto”. If the rules regarding the purchase of SVB and SNBY are true, it seems Frank’s suspicions are justified.
Do you think the FDIC’s alleged decision to block bidders from doing business with cryptocurrency firms is justified, or do you think it unfairly disadvantages potential buyers? Share your thoughts in the comments section below.
Image credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. This is not a direct offer or the solicitation of an offer to buy or sell, or a recommendation or endorsement of any product, service or company. bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
