US regulators are reportedly investigating crypto-friendly Signature Bank for money laundering. But is this the latest development in Operation Choke Point?
US regulators were probing Signature Bank’s involvement with crypto customers before the Federal Reserve closed it down on Sunday, according to a Bloomberg report.
The Justice Department was investigating whether the bank followed proper anti-money laundering compliance. while the US Securities and Exchange Commission (SEC) was “looking through” a confidential investigation.
It is not clear whether the investigation was the reason for the sudden closure of the bank on Sunday.
The target of Operation Choke Point?
After Signature Bank was shut down by the authorities, there was discussion within the community about whether it was part of the crypto crackdown by US regulators. Venture Capitalist Nick Carter Tweeted“Regulators Wanted to Eliminate the Last Major Pro-Crypto Bank.”
Barney Frank, a member of the bank’s board and one of the drafters of the Dodd-Frank Act, said that regulators shut down Signature Bank for sending an anti-crypto message. However, the New York State Department of Financial Services stated that the closure of Signature Bank was due to a lack of transparency rather than crypto.
Last week, three crypto-friendly banks, Silvergate, Silicon Valley, and Signature Bank were shut down.
Carter believes that US regulators have ignited Operation Choke Point 2.0, a rogue operation to reduce banking access to crypto firms. According to him, the government kicked off the mission on January 3 by warning banks with crypto exposure.
The Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) issued a joint statement to banks asking them to align with “safe and sound banking practices”.
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BeInCrypto has reached out to the company or the person involved in the story for an official statement regarding the recent development, but has yet to hear back.