Crypto blamed unfairly for Signature Bank’s liquidity crisis, says NY regulator

The Superintendent of the New York State Department of Financial Services (NYDFS), Adrienne Harris, has refuted allegations that cryptocurrency depositors were liable for the illness of Signature Bank. 

At a proceeding astir stablecoins held by the House Financial Services Committee connected April 18, Harris stated that the liquidity situation that led to Signature Bank’s illness was not caused solely by cryptocurrency depositors, but by assorted depositors withdrawing their funds from the bank, Bloomberg reported.

Harris reiterated her stance connected cryptocurrencies during the hearing, dismissing the conception that they were liable for the bank’s nonaccomplishment and calling it a “misnomer.”

This is successful enactment with her earlier comments astatine the Links NYC conference, wherever she defended cryptocurrencies and expressed skepticism toward authorities officials who criticized them.

Signature’s crypto clients

Superintendent Harris stated that lone 20% of depositors astatine Signature Bank were cryptocurrency clients, and 20% of each depositors withdrew their assets, which led to the bank’s liquidity crisis.

“The outflow of crypto deposits were successful nonstop proportionality to the practice successful the depositor basal overall.”

Signature Bank’s depositors who withdrew their funds and contributed to the bank’s liquidity situation came from assorted sectors, including the crypto industry, nutrient vendors, fiduciaries, trusts, and instrumentality firms, according to Superintendent Harris.

The slope had antecedently stated plans to trim services for the crypto manufacture owed to regulatory unit and challenges wrong the integer plus sector. Regulators took power of the slope aft outflows reached billions of dollars during a monolithic slope run.

The station Crypto blamed unfairly for Signature Bank’s liquidity crisis, says NY regulator appeared archetypal connected CryptoSlate.