After more than 20 years holding the reins at Signature Bank, co-founder Joseph DePaolo will be stepping down as CEO and president as part of a reshuffling of the bank's leadership.
Signature Bank — known to be friendly to crypto clients — announced today that DePaolo, its current CEO and president, will transition to a senior advisory role this year. The firm's chief operating officer, Eric Howell, will step into the president role, effective March 1, and will eventually take the reins as CEO following DePaolo's transition into the senior advisor role, the company said in a release.
"This succession plan is an integral part of a long-standing commitment by the board of directors to ensure Signature Bank’s distinctive business model continues to thrive and differentiate without interruption," said the company.
Howell joined the commercial bank in 2013 as a controller and has continued to increase his responsibilities at the firm.
"I have been fortunate to work closely with Eric since he became CFO. I have witnessed him tackle every ascending role he has held within the Bank with a keen sense of confidence, gumption and business acumen," said Scott Shay, co-founder and chairman of the board at Signature Bank, in the release.
Signature's crypto links
Signature was the first FDIC-insured bank to launch a blockchain-based digital payments platform called Signet, which enabled clients to make real-time payments in U.S. dollars using blockchain technology. It was also the first blockchain-based solution approved for use by the New York Department of Financial Services (NYDFS).
Earlier this week, the NYDFS-regulated stablecoin issuer Paxos was ordered to cease the minting of its Binance U.S. dollar stablecoin (BUSD) by the organization. It was a surprise regulatory move that shocked the industry.
Regulatory action against crypto companies in the U.S. has intensified in recent months. Crypto exchange Kraken settled with the SEC over the failing to register the offer and sale of its “crypto asset staking-as-a-service program” last week, paying a $30 million fine in the process. Also, Lender Nexo is set to close down its earn program in the U.S. following a settlement with the SEC.
Signature Bank significantly pared back its crypto operations last year and started to limit crypto transactions. In December, the firm said it would introduce caps to reduce the concentration of deposits from clients in the digital asset industry to below 20% of total bank deposits.
The bank reported $110.36 billion in assets and $88.59 billion in deposits as of December 31, 2022, the release said. Collapsed crypto exchange FTX was one of Signature Bank's clients; however, the crypto exchange’s deposits with Signature amounted to less than 0.1% of the bank’s overall deposits, according to a report from Coindesk.
"We are not just a crypto bank and we want that to come across loud and clear,” said DePaolo at an investor conference in New York late last year.
Disclaimer: Beginning in 2021, Michael McCaffrey, the former CEO and majority owner of The Block, took a series of loans from founder and former FTX and Alameda CEO Sam Bankman-Fried. McCaffrey resigned from the company in December 2022 after failing to disclose those transactions.
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