Barney Frank, Director of Signature Bank and former US House Rep claims that the bank was shut down by the US government just to send a message to crypto, despite being solvent.

Barney Frank, a director at Signature Bank which was shut down by the government over the weekend has just said that the bank was shut down to send a message to crypto, and not because they were facing any kind of insolvency. These are shocking revelations as it appears that the US government just killed a legal and solvent bank just because they can, just because didn't approve of pro-crypto stance of the bank. In the process, wiping out shareholders to zero.

These are quotes from Frank, who also drafted the Dodd-Frank Act:

“I think part of what happened was that regulators wanted to send a very strong anti-crypto message,” said board member and former congressman Barney Frank.

For his part, Frank, who helped draft the landmark Dodd-Frank Act after the 2008 financial crisis, said there was “no real objective reason” that Signature had to be seized.

“I think part of what happened was that regulators wanted to send a very strong anti-crypto message,” Frank said. “We became the poster boy because there was no insolvency based on the fundamentals.”

https://www.cnbc.com/2023/03/13/signature-bank-third-biggest-bank-failure-in-us-history.html

This confirms many people's beliefs that the bank was shut down just because they had a pro-crypto stance, and were facilitating crypto exchanges and stablecoin liquidity using their Signet network, which allowed stablecoins like USDC to obtain banking system liquidity throughout the weekend when other banks were closed. The government's statement said there were "systemic issues" at Signature Bank, and was entirely vague.

Compare the vague statement issued by NYDFS on closure of Signature Bank (found here) versus the detailed order passed by California DFPI taking over Silicon Valley Bank (found here). In Silicon Valley Bank's case, California DFPI have specifically found that the bank is insolvent and passed a fact finding order, whereas in Signature bank, the NYDFS statement is totally value with no fact finding order.

There was no liquidity issue at Signature bank, but the government used the window of opportunity that arose over the weekend from Silicon Valley Bank's failure, to kill off another bank SBNY which was pro-crypto.

As the saying goes, "Never let any crisis go to waste"

It now appears that the bank was killed just to shut down crypto access to banking. Shareholders in SBNY have been wiped out to zero as the FDIC took over the bank. The shares were trading at $70 per share at close of trading on friday. Not only the shareholders, even unsecured bond holders of the bank have been wiped out.