Adrienne A. Harris, administrator of the New York State Department of Financial Services, branded claims that Signature Bank’s closure was related to the crypto business “ludicrous. Harris claimed that the bank’s “high percentage of uninsured deposits” and “inadequate liquidity” were part of the reason for its closure.
Signature Bank’s Liquidity Challenge
”
Adrienne A. Harris, head of the New York State Department of Financial Services (DFS), recently reiterated the regulator’s position that Signature Bank’s closure had nothing to do with crypto banking. According to Harris, the regulator’s administrative head, the decision to close the bank was made not only because the bank had a “high percentage of uninsured deposits” but also because it lacked the liquidity to meet withdrawal requests.
At a recent event hosted by blockchain analytics firm Chainalysis, Harris also denied claims that her department’s decision to close Signature Bank may be part of an elaborate scheme aimed at strangling the crypto industry.
The idea that Signature’s possession is about crypto and that this is ‘choke point 2.0’ is really ludicrous,” Harris said.
As Bitcoin.com News previously reported, after DFS announced its decision to close Signature Bank, board member and former U.S. Congressman Barney Frank said that DFS’ decision was motivated by a perceived negative predisposition toward crypto suggested. Frank was a co-sponsor of the 2010Dodd-Frank Actargued that there is no “basis-based insolvency.”
Although Frank’s claims were immediately denied by DFS, rumors are circulating that DFS’s actions against Signature Bank are part of a coordinated attack on the crypto industry, supporting claims that DFS may be trying to kill the crypto industry, Critics of the regulator’s decision to place Signature Bank under receivership point to the institution’s status as a bank that crypto companies can rely on.
Crypto Industry’s Immature Compliance Programs
In her latest attack on critics, however, Harris argued that compliance programs in the crypto industry are not yet mature. She explained:
The Bank Secrecy Act, anti-money laundering (compliance), and cybersecurity are not mature yet. We look forward to the day when these systems mature and scale up as well as the business side.
Meanwhile, the DFS is finalizing regulations that will give it the authority to evaluate the crypto industry, according to a report in the Wall Street Journal. The regulations will allow the DFS to synchronize its regulation of the crypto industry with the way it evaluates insurance and banks. Regarding examination fees paid by firms, the report quotes Harris as clarifying that such revenues would be added to DFS resources.
Image credit: Shutterstock, Pixabay, Wiki Commons
