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Crypto-friendly Signature Bank probed by U.S. DoJ before its collapse

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  • The U.S. Justice Department reportedly probed Signature Bank before state regulators shut it down.
  • The probe revolved around the bank’s anti-money laundering steps.

Signature Bank, the crypto-friendly financial institution that was shut down by the New York Department of Financial Services (NYDFS) on 13 March, was reportedly the subject of a probe by the United States Department of Justice earlier this week. 

DoJ’s probe was related to money laundering

According to a report by Bloomberg, DoJ investigators in Manhattan and Washington were looking into the downed bank’s relationship with its crypto clients, specifically the steps taken to detect money laundering.

People familiar with the matter revealed that this involved monitoring clients who were opening new accounts and scrutinizing transactions to look for signs of criminal activity. The Securities and Exchange Commission was also a part of the probe. 

When asked for a comment, an SEC spokesperson directed Bloomberg to a statement made by the agency’s chairman Gary Gensler earlier this week. On Sunday, Gensler stated:

“We will investigate and bring enforcement actions if we find violations of the federal securities laws.” 

It is important to note that Signature Bank’s staff has not been accused of any wrongdoing as of now. It is possible that the probe may end without the filing of any charges. At this time, it is not clear if the Justice Department’s probe into the bank had any effect on the NYDFS’s decision to shut it down. 

Speaking on its decision to close Signature Bank, the NYDFS has stated that it had “nothing to do with crypto.” As per a recent report by Reuters, the New York financial regulator had no confidence in the bank’s leadership following the shutting down of Silicon Valley Bank.

The regulator was responding to claims made by Signature Bank board member and former U.S representative Barney Frank. He confirmed that Signature Bank’s closure had nothing to do with the bank’s financial fundamentals. According to the former lawmaker,

“Part of what happened was that regulators wanted to send a very strong anti-crypto message.”

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Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
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