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In a recent turn of events, prominent short-seller Bill Ackman hinted that the erstwhile crypto-friendly bank, Signature Bank, might get acquired by a major financial institution in the United States. Ackman in a cryptic tweet on Friday, suggested that Bank of America could possibly buy the derailed banking institution, however, without citing the source of information.
Bank Of America To Buy Signature Bank?
After being closed by regulators from the state of New York on Sunday, Signature Bank is presently up for sale. The FDIC, on the other hand, is reportedly going over bids with the last date being Friday. However, there is one major caveat in the buyout and that’s the dissolution of crypto-focused services.
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According to Ackman, who has lately been fairly vocal about the banking crisis, is of the opinion that unless uninsured deposits are protected, the “cost of capital is going to rise for smaller banks pushing them to merge or be acquired by the SIBs”.
The liquidation of the New York-based bank happened less than a week after Silvergate Bank in California voluntarily closed its doors and two days after Silicon Valley Bank, another California-based bank, went under. Considered to be crypto-friendly banking institutions, all three of the banks in question have since gone defunct.
I am hearing that @BankofAmerica is going to buy Signature Bank on Monday. Unless and until we can protect uninsured deposits, the cost of capital is going to rise for smaller banks pushing them to merge or be acquired by the SIBs. I don’t think this is good for America.
— Bill Ackman (@BillAckman) March 17, 2023
However, Charles Gasparino, an esteemed American journalist, casts doubt on the ongoing acquisition deal. According to him, the FDIC might still have a few issues with the buyout deal by Bank of America. However, he opines that it can still happen albeit at a later date.
BREAKING: People close to the @FDICgov are throwing cold water on the @BofA – SBV purchase. That doesnt mean it wont happen, but its not happening now they say
— Charles Gasparino (@CGasparino) March 17, 2023
Bank Collapse A Target On Crypto?
As reported earlier on CoinGape, Barney Frank, a board member at Signature Bank and a former member of the Democratic Party in the United States Congress, proposed that the takeover was prompted by an anti-crypto narrative. Frank suggested that Signature Bank was solvent, but that regulators intervened to push forward their hidden agenda.
However, the New York Department of Financial Services has disputed that cryptocurrency played any role in its decision to close Signature Bank. Instead, they have stated that the decision was made due to a “crisis of confidence” in the bank’s management.
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