New York regulators quickly took control of Signature Bank Sunday night, making it the third bank to close its doors in a week—and the third largest bank failure in U.S. history. 

The move to shutter the crypto-friendly bank, which lent money to firms in the digital asset space and facilitated crypto-to-fiat transactions via its Signet network, caught many by surprise (including those who worked there.)

Why was it closed, then? And is it part of a broader crackdown by regulators targeting crypto?

Barney Frank, the ex-congressman behind the Dodd-Frank Act and a Signature Bank board member, yesterday told CNBC that regulators shut down the bank to send “a very strong anti-crypto message.” But the New York Department of Financial Services today denied Frank’s claim.

The regulator said the move had nothing to do with crypto, telling Decrypt in an email that “the decisions made over the weekend were not crypto related” and that it the body “has been facilitating well-regulated crypto activities for several years, and is a national model for regulating the space.”

But industry insiders who spoke with Decrypt say they’re not buying it, and point to a growing trend that goes back months if not years.

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Author: Mathew Di Salvo

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