The decision to close Signature Bank “has nothing to do with crypto,” said the New York State Department of Financial Services, the regulator that owned the troubled bank on Sunday. The financial watchdog argued that its decision to put Signature Bank into receivership was “based on the current state of the bank and its ability to do business in a safe and sound manner.”
It has nothing to do with Crypto.”
After the New York State Department of Financial Services (NYDFS) took ownership of Signature Bank on Sunday, speculation about whether the regulatory action is related to cryptocurrencies has been circulating.
Former U.S. Congressman Barney Frank, who was involved in drafting the Dodd-Frank Act and has served on Signature Bank’s board since 2015, believes the regulatory move is related to cryptocurrencies. He told CNBC on Monday.
It may have been that regulators wanted to send a very strong anti-crypto message.
“We were a poster child because we were not insolvent based on fundamentals.”
Last September, the cryptocurrency sector accounted for nearly 25% of Signature Bank’s total deposits. But in December, the bank said it planned to reduce crypto-related deposits by $8 billion.
In response to claims that Signature Bank’s closure was crypto-related, a spokesperson for the New York State Department of Financial Services told Fortune.
The decision made over the weekend has nothing to do with crypto. The decision to own the bank and turn it over to the FDIC was based on the current state of the bank and its ability to do business in a safe and sound manner on Monday.
A NYDFS spokesperson further shared that there was a spike in withdrawal requests over the weekend, but Signature Bank was unable to provide reliable and consistent data.
Regarding crypto, the spokesperson stated that NYDFS “has been promoting well-regulated crypto activity for several years and is a national model for regulating this space.”
Frank was not surprised that New York State regulators stated that their decision to occupy Signature Bank had nothing to do with cryptocurrencies. To the best of his knowledge, he claimed that the bank’s executives were working to provide data to regulators, claiming:
I think (crypto) was a factor: …… It’s puzzling why it (Signature Bank) was shut down.
“If it had opened on the Monday that these two policies were announced, I’m sure it would have been in reasonably good shape and certainly functioning,” the former congressman claimed.
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