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New York Regulator Calls Crypto Theories Associated With Signature Bank Closure ‘Ludicrous’

Adrienne A. Harris, the superintendent of New York’s Department of Financial Services, has branded as “ludicrous” the claims that the closure of Signature Bank was related to its crypto business. Harris insisted that the bank’s “high percentage of uninsured deposits” and insufficient liquidity were some of the reasons why it was closed.

Signature Bank’s Liquidity Challenges

Head of the New York State’s Department of Financial Services (DFS), Adrienne A. Harris, recently reiterated the regulator’s stance that the closure of Signature Bank had nothing to do with its crypto banking business. According to Harris, a superintendent with the regulatory body, the decision to close the bank was taken not only because the bank had “a high percentage of uninsured deposits” but it also lacked the liquidity to meet withdrawal requests.

Speaking at a recent event organized by the blockchain analysis firm, Chainalysis, Harris also dismissed assertions that her department’s closure of the Signature Bank may be part of an elaborate scheme that is aimed at strangling the crypto industry.

“The idea that the taking possession of Signature was about crypto and this is ‘Choke Point 2.0’ is really ludicrous,” Harris said.

As previously reported by News, after DFS announced its decision to shut down Signature Bank, board member and former U.S. lawmaker, Barney Frank, suggested that the DFS decision was motivated by its perceived negative predisposition towards crypto. Frank, who co-sponsored the 2010 Dodd-Frank Act, insisted there was no “insolvency based on the fundamentals.”

Although Frank’s claims were immediately rejected by the DFS, rumours suggesting the regulator’s action against Signature Bank is part of a coordinated attack on the crypto industry have swelled. To support claims the DFS may be out to kill the crypto industry, critics of the regulator’s decision to place Signature Bank under receivership point to the financial institution’s status as the go-to bank for crypto companies.

Crypto Industry’s Immature Compliance Programs

However, in her latest salvo against critics, Harris claimed the crypto industry’s compliance programs still lack maturity. She explained:

There is still a lack of maturity around Bank Secrecy Act-anti-money-laundering [compliance] and cybersecurity. We’re eager for the day when those systems mature and scale as the business side does.

Meanwhile, a report in the Wall Street Journal said the DFS is about to finalize regulations that give it authority to assess the crypto industry. This according to the report will enable the DFS to sync its regulation of the crypto industry with how it assesses the insurance and banking sectors. Concerning the fees paid by companies for their examinations, the report quotes Harris revealing that such revenues will be added to DFS’ resources.

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Terence Zimwara

Terence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route.

Image Credits: Shutterstock, Pixabay, Wiki Commons

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