A Signature board member claims that there was “no real objective reason” that regulators seized the bank. 

According to a March 13 report from CNBC, the statement from regulators announcing the shutdown of Signature Bank came as a shock to the firm’s own executives.

Former U.S. Rep Barney Frank, who sits on Signature’s board, said that the firm had no indication of any problems until a run on deposits late on Friday, which he attributed to the contagion from Silicon Valley Bank’s (SVB) collapse. Depositors pulled $10 billion from Signature, which Frank said had slowed by Sunday and the firm believed they had the situation under control.

Later that evening, however, Signature’s top managers were removed and the bank was closed.

“I think part of what happened was that regulators wanted to send a very strong anti-crypto message. We became the poster boy because there was no insolvency based on the fundamentals,” said Frank. 

Signature’s 24/7 crypto payments network SigNet had $16.5 billion worth of deposits from clients.

It is worth noting that Frank, who helped draft the Dodd-Frank Act after the 2008 financial crisis, might not be as objective in his opinion, seeing as he is a Signature board member after all. Still, some market participants who analysed the bank’s Hold-to-Maturity securities losses compared to its total asset base, found that there was little justification for its closure.

Messari founder Ryan Selkis also opined that recent actions by regulators against pro-crypto banks, including Silvergate, were a targeted attack.

“Silvergate is still solvent, despite an unprecedented 90 day $12 billion liquidation sparked by a corrupt sitting Senator who coordinated a bank run w/ short sellers. Signature was healthy. NYDFS went rogue in shutting them down, and surprised even the FDIC,” tweeted Selkis.