According to a report, money laundering was a possible cause of Signature Bank’s failure

A pair of investigations, one into whether or not the pro-crypto bank was doing anything to prevent money laundering, were apparently underway.

Before its failure, cryptocurrency-friendly Signature Bank was under investigation by two US federal agencies.

It was reported on March 15 by Bloomberg, citing sources with knowledge of the situation, that Justice Department investigators were looking into whether or not Signature had implemented adequate steps to identify possible money laundering by its customers.

It was said that the regulator was especially worried about whether or not the bank was proactively checking transactions for “signs of wrongdoing” and screening account holders.

According to two unnamed individuals cited by Bloomberg, the Securities and Exchange Commission was also “taking a look” at the bank as part of a separate investigation. The specifics of the SEC’s investigation were not revealed in the news.

It’s unclear when the investigations started or if they had any role in the recent decision by New York state authorities to liquidate the bank.

According to published reports, neither Signature nor its employees have been accused of wrongdoing. The SEC and DOJ may close their investigations without filing any charges or taking further action.

The investigation follows a class action lawsuit signed by Signature shareholders on March 14 against the bank and its management for making “financially robust” claims only three days before the government closed down the bank.

According to former Signature Bank board member Barney Frank, the authorities planned “to deliver a powerful anti-crypto message” on March 13.

Furthermore, Frank said that the crypto-friendly bank became the “poster boy” since there was “no bankruptcy based on the fundamentals.”

On March 12, Signature joined Silvergate Capital and Silicon Valley Bank in closing their doors for good. Separate investigations into the failures of Silvergate Capital and SVB have been launched by the Department of Justice and the Securities and Exchange Commission.

According to reports, authorities will look into what happened before the bank failed, including the CEO and CFO selling shares in SVB for two weeks.

SEC Chair Gary Gensler said on March 12 that the agency “would investigate and undertake enforcement proceedings if we uncover breaches of the federal securities laws.” Still, the SEC has not issued an official statement on the problems.

Also Read: MakerDAO Seeks To Reduce Volatility After USDC Issues Moved Some Users To DAI