Adrienne A. Harris, superintendent of the New York Department of Financial Services, called claims that Signature Bank’s closure was related to its cryptocurrency business “ludicrous.” Harris insisted that the bank’s “high percentage of uninsured deposits” and insufficient liquidity were among the reasons it was closed.
Signature Bank Liquidity Challenges
The head of the New York State Department of Financial Services (DFS), Adrienne A. Harris, recently reiterated the regulator’s stance that Signature Bank’s closure had nothing to do with its crypto banking business. According to Harris, the regulator’s superintendent, the decision to close the bank was made not only because the bank had “a high percentage of uninsured deposits” but also lacked liquidity to meet withdrawal requests.
Speaking at a recent event hosted by blockchain analytics firm Chainalysis, Harris also dismissed claims that his department’s closure of Signature Bank may be part of an elaborate scheme that aims to strangle the blockchain industry. cryptography.
“The idea that the Signature takeover was about cryptocurrency and this is ‘Choke Point 2.0’ is really ridiculous,” Harris said.
As Bitcoin.com News previously reported, after DFS announced its decision to shut down Signature Bank, board member and former US legislator Barney Frank suggested that DFS’s decision was motivated by its perceived negative bias towards cryptocurrencies. Frank, who cosponsored the 2010 Dodd–Frank Actit insisted that there was no “insolvency based on fundamentals.”
Although Frank’s claims were immediately rejected by the DFS, rumors have been mounting that suggest the regulator’s action against Signature Bank is part of a coordinated attack on the cryptocurrency industry. To back up claims that the DFS may be out to kill the cryptocurrency industry, critics of the regulator’s decision to place Signature Bank in receivership point to the financial institution’s status as the go-to bank for businesses. of cryptocurrencies.
Immature Crypto Industry Compliance Programs
However, in his latest salvo against the critics, Harris claimed that the crypto industry’s compliance programs still lack maturity. She explained:
There is still a lack of maturity around the Bank Secrecy Law-anti-money laundering (compliance) and cybersecurity. We look forward to the day when those systems mature and scale like the business side does.
Meanwhile, a report in the Wall Street Journal said that the DFS is nearing finalization of regulations that give it authority to evaluate the cryptocurrency industry. This, according to the report, will allow the DFS to synchronize its regulation of the crypto industry with how it assesses the banking and insurance sectors. Regarding the fees companies pay for their exams, the report cites Harris and reveals that such revenue will add to DFS resources.
What are your thoughts on this story? Let us know what you think in the comments section below.
image credits: Shutterstock, Pixabay, Wiki Commons
