The U.S. government and the Federal Deposit Insurance Corporation (FDIC) this week will bid and auction off failed American financial institutions Silicon Valley Bank (SVB) and Signature Bank (SNBY) by the 17th It is. However, sources familiar with the matter say that eligibility to buy the banks is strictly limited and reportedly the buyers will not be able to deal with the crypto business anymore.
Controversy over alleged crypto restrictions on prospective bank purchasers
The second and third largest bank failures in the U.S. occurred within 48 hours of each other last week, and this week, these two financial institutions are being sold. An unnamed sourcefamiliar with the matter told Reutersthat the FDIC is accepting bids for Silicon Valley Bank (SVB) and Signature Bank (SNBY), with a final offer deadline of Friday, March 17, 2023 The FDIC already tried to auction SVB late last week. The FDIC had already attempted to auction SVB late last week, but the deal did not go through, and the U.S. government has proposed a bailout for depositors of both banks, sources said.
Sources said the FDIC will use investment bank Piper Sandler Companies to manage the auction for both banks. They also said that while the FDIC would prefer a complete sale of SVB and SNBY, partial offers related to specific branches or industries would be considered. Strict rules apply to the purchase of both financial institutions, as only existing licensed banks can submit offers. Reuters’ David French and Pete Schroeder have heard that the scheme is designed to give traditional financial institutions an “advantage” over private equity firms.
We were also informed that in the case of acquiring SVB and SNBY, bidders must not give favors to cryptocurrency companies.” Any buyer of Signature would have to agree to give up all crypto business at the bank, the two sources added,” a report by French and Schroeder elaborates. Reuters’ account of the situation, which originated with an unnamed source, contradicts a statement made by the New York State Department of Financial Services.
New York regulators insisted that the recent bank shutdown had “nothing to do with crypto. “Barney Frank, a Signature Bank board member and former U.S. Representative from Massachusetts, said the shutdown was an “anti-crypto” message The regulator issued this statement after Frank said he suspected that if the rules regarding SVB and SNBY purchases are true, Frank’s suspicions may be justified.
Do you think the FDIC’s decision to allegedly restrict bidders from dealing in cryptocurrency businesses is justified or do you think it will unfairly disadvantage potential buyers? Share your thoughts in the comments section below.
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