New York Authority Confirms Crypto Did Not Bring Down Signature Bank

Superintendent of NYDFS Adrienne Harris stated that crypto was not to blame. The bank’s liquidity problems pushed regulators to close it down.

The New York State Department of Financial Services has commented on the significance of cryptocurrency in Signature Bank’s failure. In contrast to the current surge of assaults on the industry in the United States, not everything is negative.

On March 5, NYDFS Superintendent Adrienne Harris verified at a crypto industry conference that crypto was not the cause of the closure.

Mid-March, federal regulators shut down Signature Bank, citing systemic risks posed by the crypto-focused bank. Following the events, the mainstream media blamed crypto in its usual flurry of FUD.

Harris confirmed that the action was taken because of the bank’s liquidity, and not because it had consumers who held digital assets.

In addition, she described the circumstances preceding the failure as “a modern bank run.” She stated that Signature had a large proportion of uninsured deposits and lacked liquidity management protocols to accommodate withdrawal requests.

According to the Federal Deposit Insurance Corporation, Signature Bank had approximately $4 billion in crypto-asset-related deposits.

Since the demise of FTX in November, U.S. regulators have focused extensively on cryptocurrencies. Financial regulators are attempting to protect the traditional banking system from the threat posed by decentralized money.

Harris was more optimistic about cryptocurrency than other regulatory agency heads. She stated that the industry lacks maturity.

BeInCrypto reported on March 5 that there were no ties between stablecoin issuer Tether and the demise of Signature Bank.

Also Read: The Crypto Industry Needs More Decentralized Exchanges, According To Binance CEO Changpeng Zhao