Prior to the bank’s shutdown, Signature Bank came under scrutiny by the U.S. Attorney General and the Securities and Exchange Commission in relation to suspicious cryptocurrency-related transactions, framed within concerns about systemic risks in the sector. This detail was reported by Bloomberg, which cited the source for its account.
The report emphasizes that the Department of Justice has repeatedly cautioned entities working with digital currencies to establish rigorous client identification and to verify the legality of funds moving through financial channels. In parallel, banks and other financial institutions are under a duty to flag and report transactions that appear suspicious to the appropriate authorities, a standard that seeks to curb illicit activity and protect the financial system.
Bloomberg notes that neither Signature Bank nor its employees have been charged with misconduct at this stage, leaving open the possibility that the investigation could conclude without further action. Nevertheless, questions remain about when the investigation actually began and whether it played a role in regulators’ decision to shutter the bank on March 12. Regulators stated that a lack of reliable and consistent data from governance structures at the institution eroded confidence in management and contributed to the regulatory decision.
On March 14, Fitch Ratings downgraded Signature Bank’s long-term corporate credit rating from BBB+ to D, a move that followed the closure of the New York-based lender by state authorities over the weekend. The downgrade underscored the perceived deterioration in the bank’s risk profile and the broader implications for its funding and operations, as noted in the rating agency’s assessment and market commentary.
The series of events surrounding Signature Bank reflects ongoing tensions between crypto-related activity, regulatory vigilance, and the stability of traditional financial institutions that engage with digital asset ecosystems. Observers point to the importance of robust due diligence, transparent reporting practices, and ongoing regulatory coordination to manage risk exposure in a rapidly evolving landscape. The public record surrounding the case continues to evolve as authorities review compliance measures and monitor how institutions balance innovation with established financial safeguards.