The US government and the Federal Deposit Insurance Corporation (FDIC) are auctioning off two failed US financial institutions, Silicon Valley Bank (SVB) and Signature Bank (SNBY), this week, and Offers expire March 17. However, sources familiar with the matter said that the qualifications to buy the banks are tight and buyers are reportedly no longer able to deal with crypto deals.
Controversy Surrounds Alleged Crypto Restrictions For Potential Bank Buyers
Last week, the second and third largest bank failures in the United States occurred within 48 hours of each other, and the two financial institutions will be sold this week. Anonymous 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 already tried to auction off SVB last weekend, but no deal materialized. deal, and the US government proposed a bailout plan for depositors of both banks.
The sources revealed that the FDIC is using investment bank Piper Sandler Companies to manage the auctions for both banks. The sources added that the FDIC expects to sell both SVB and SNBY in their entirety, but partial offers at specific bank branches and verticals will be considered. To buy the two financial institutions, strict rules apply, as only an existing chartered bank can make an offer. Reuters contributors David French and Pete Schroeder were told the plan was designed to give traditional lenders “an edge” over private equity firms.
Journalists were also told that bidders should not cater to cryptocurrency companies if they are going to acquire SVB and SNBY. “Any buyer of Signature must agree to give up all cryptocurrency business at the bank, the two sources added,” French and Schroeder’s report details. The Reuters account of the situation, coming from anonymous sources, contradicts the statement made by the New York State Department of Financial Services.
The New York regulator insisted that the recent bank closures “had nothing to do with cryptocurrency.” The regulator made this statement after Signature Bank board member and former member of the US House of Representatives from Massachusetts, Barney Frank, said that he suspected the shutdown was an “anti-crypto” message. . If the rules regarding the purchase of SVB and SNBY are true, then it seems that Frank’s suspicions may be justified.
Do you think the FDIC’s alleged decision to restrict bidders from dealing with cryptocurrency businesses is justified, or do you think it unfairly hurts potential buyers? Share your thoughts in the comments section below.
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