New York Regulator Confirms Crypto Doesn’t Sink Signature Banks

On March 5, NYDFS Supervisor Adrienne Harris revealed at a crypto industry conference that crypto was not the reason for the shutdown. Signature Bank was shut down by federal regulators in mid-March, citing concerns about the crypto-focused bank’s systemic risk. However, in the FUD flurry after the incident, the mainstream media blamed crypto.

Harris said the decision was taken because of the bank’s liquidity, not because it had clients with digital assets. He also called the circumstances leading up to the disaster a “new-fangled bank run.” He said that Signature has a significant proportion of uninsured accounts and does not have a liquidity management process in place to accommodate withdrawal requests.

According to the Federal Deposit Insurance Corporation, Signature Bank has about $4 billion in deposits related to its crypto asset banking operations. (FDIC). Following the FTX crash in November, US regulators have focused significantly on crypto this year. A decentralized form of money is a challenge to the established banking system, which financial regulators are trying to protect.

However, Harris is one of the few people who doesn’t believe that cryptocurrencies are the root of all evil. “The idea that having a Signature is all about crypto and it is a ‘Choke Point 2.0’ is absolutely ludicrous,” he added, according to the WSJ.

The term “Operation Choke Point 2.0” refers to the idea that regulators plan to remove cryptocurrencies and shut them down from the financial system. Harris is more optimistic about cryptocurrencies than previous heads of regulatory agencies. However, he said the industry was not yet mature.

“There are still deficiencies in anti-money laundering and cybersecurity compliance under the Bank Secrecy Act.” We look forward to the day when the system evolves and evolves with the business.” BeInCrypto claimed on March 5 that there are no ties between stablecoin issuer Tether and the death of Signature Bank.

The market has been down moderately today, with a 1.3% drop in total market cap. As a result, the current number is $1.19 trillion. Bitcoin (BTC) fell 1.5% to $28,132, while Ethereum (ETH) dipped slightly to below $1,900.