On Thursday, February 16th, Signature Bank announced that Eric Howell, the current Chief Operating Officer (COO), will replace Joseph DePaolo as the new Chief Executive Officer (CEO) of the bank. DePaolo, who co-founded Signature Bank in 2001, will take on an advisory role. Under DePaolo’s leadership, the bank has grown into one of the biggest financial institutions in the US, achieving this growth organically without any acquisitions.
The spokesperson for Signature Bank stated that this leadership change has been in the works for years and is not related to the bank’s digital assets business. Signature Bank was among the banks that initially courted the cryptocurrency industry while it was booming.
However, since the downfall of FTX, a Signature Bank client, the bank has been trying to distance itself from the digital assets world. Howell clarified during a conference that the Bank is “not just a crypto bank” and announced that the bank would exit $8 billion to $10 billion worth of deposits in that space, which can easily be covered through cash and borrowings.
The bank’s crypto customers included Celsius Network, which is now bankrupt, and FTX, whose implosion significantly impacted the crypto world. Trading company Statistica Capital sued Signature Bank earlier this month, alleging that the bank “had real knowledge of and substantially supported the now-famous FTX fraud.” The lawsuit also accuses Signature of allowing the bank’s blockchain-based payments network, Signet, to mix FTX customer monies with other funds.
Following FTX’s demise, Silvergate Capital, another bank that had conducted business in the cryptocurrency sector, has also been coping with the industry’s slump. Silvergate hosted FTX and Alameda’s accounts; the bank has not been charged with any crime, but the US Justice Department is investigating this.
According to Silvergate, it performed due diligence on both companies during the onboarding process and is currently looking into transactions involving the two businesses.
