US Govt Auctions Failed Banks SVB and SNBY, Crypto Restrictions Apply –
The US government and the Federal Deposit Insurance Corporation (FDIC) are auctioning off two failed American financial institutions, Silicon Valley Bank (SVB) and Signature Bank (SNBY) this week, with bids due by March 17, Matter said Qualifications to buy the banks are strict, and according to reports, the buyers can no longer handle crypto trades.
Controversy surrounding alleged crypto restrictions on would-be bank buyers
Last week, the second and third largest bank failures in America occurred in 48 hours, and the two financial institutions will be sold this week. Unidentified sources familiar with the matter told Reuters that the FDIC is accepting bids for Silicon Valley Bank (SVB) and Signature Bank (SNBY), with final bids due Friday, March 17, 2023 . The FDIC attempted to auction off the SVB last weekend, but no deals materialized and the US government proposed a bailout plan for depositors at both banks.
Sources revealed that the FDIC uses investment bank Piper Sandler Companies to administer the auctions of both banks. The sources added that the FDIC hopes to sell both SVB and SNBY outright, but is considering partial offers for specific bank branches and industries. Strict rules apply to the purchase of the two financial institutions, since only an existing licensed bank can submit an offer. Reuters contributors David French and Pete Schroeder were told the program was designed to give traditional lenders an “advantage” over private equity firms.
Reporters were also informed that bidders are not allowed to serve cryptocurrency firms if they want to acquire SVB and SNBY. “Any Signature buyer must agree to give up all crypto business with the bank, the two sources added,” the French and Schroeder report said. Reuters’ account of the situation, which comes from unnamed sources, contradicts the statement by the New York State Department of Financial Services.
The New York regulator insisted that the recent bank closures had “nothing to do with crypto.” The regulator made the statement after Signature Bank board member and former Massachusetts House of Representatives Barney Frank said he suspected the shutdown was “anti-crypto” messaging. If the rules for buying SVB and SNBY apply, Frank’s suspicions seem justified.
Do you think the FDIC’s alleged decision to ban bidders from trading cryptocurrency deals is justified, or do you think it unfairly disadvantages potential buyers? Do share your thoughts in the comment section below.
photo credit: Shutterstock, Pixabay, WikiCommons
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Source: Crypto News Deutsch
