OBA: bank failure a blow to Premier’s fintech ambitions – The Royal Gazette

Created: March 13, 2023 4:39 p.m

Storbybank: Signature Bank’s headquarters at 565 Fifth Avenue in New York (Photo by Google Street View)

Uncertainty appears to surround the future of Bermuda’s fintech ambitions, as the Opposition One Bermuda Alliance began raising questions this afternoon following the latest blow to Bermuda’s fintech banking strategy.

The Royal Gazette questioned the government earlier today following the dramatic financial services setbacks to banking institutions, including Signature Bank, which the government touted as the answer to Bermuda’s fintech banking dilemma.

Banks have been reluctant to take on the risk of handling digital assets for fear they could fall foul of global compliance regulations, the government admitted in 2019.

That was the day the government stated that Signature Bank “has agreed to provide a full range of banking services.”

But as reported by this newspaper, late last week New York state authorities seized control of Signature Bank and shut it down.

The Federal Deposit Insurance Corporation action came after Signature reported $110.4 billion in total assets and $88.6 billion in total deposits at the end of the year.

“What a blow to Premier’s Burt’s emerging fintech and digital asset industries,” the OBA statement said, “and furthermore, what will be the impact on the reputation of Bermuda Inc, as the government has reportedly worked hard to promote Bermuda as the destination of choice for fintech companies looking for a place to live.

The opposition continued: “Now that this banking option is off the table, what’s next for Bermuda’s emerging Digital Asset and Crypto currency industry?

“Did our government do adequate due diligence before entering into the relationship with Signature Bank?

“Have they provided any ongoing monitoring and due diligence since the start of the relationship?

“Did Bermuda regulators carry out their ongoing enhanced due diligence with New York state financial regulators?

“If they did, did they realize that as of September, almost a quarter of deposits came from the cryptocurrency, and that the bank announced in December that it would shrink its crypto-related deposits by $8 billion?! “This should have been a red flag .

“Again, this megabank failure is extremely alarming and has the real potential to compromise Bermuda’s financial services jurisdictional reputation.”