Crypto-friendly Signature Bank was under criminal investigation by the U.S. Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC) over its work with crypto clients before its closure.
The inquiries were looking into whether the bank's anti-money laundering practices were sufficient.
The bank's records were scrutinized by investigators from the DOJ in Washington and Manhattan and people from the SEC.
- Signature Bank was shut down by the New York Department of Financial Services (NYDFS) on March 12, marking the third bank collapse within a week after Silvergate Bank and Silicon Valley Bank (SVB).
- Following the closure, the Federal Deposit Insurance Corporation (FDIC) took receivership of the bank, and senior managers were discharged.
- The bank's crypto clients included Paxos, Coinbase, Circle, and Celsius.
- The inquiry may be over without further action because neither the bank nor its employees have been charged with wrongdoing.
- When the probes were opened is not known yet, and it is unclear whether it impacted the bank's closure by regulators.
The DOJ and SEC also recently launched separate probes over SVB's collapse to investigate the events resulting in the bank's shutdown.
- The Federal Reserve (Fed), the central banking system of the U.S., similarly started probing the reasons for SVB's collapse and how the bank was supervised and regulated.
- Likewise, Silvergate Bank is under investigation by the DOJ over dealings with bankrupt crypto exchange FTX and its sister company Alameda Research.
