The choice to shut down Signature Bank had “nothing to do with crypto,” mentioned the New York State Department of Financial Services, the regulator that took possession of the troubled financial institution on Sunday. The monetary watchdog insisted that its choice to put Signature Bank in receivership “was based on the current status of the bank and its ability to do business in a safe and sound manner.”
‘Nothing to Do With Crypto’
After the New York State Department of Financial Services (NYDFS) took possession of Signature Bank on Sunday, there have been speculations concerning whether or not the regulatory motion was linked to cryptocurrency.
Former U.S. Representative Barney Frank, who was concerned within the drafting of the Dodd-Frank Act and had been a member of Signature Bank’s board since 2015, believes that the regulator’s transfer was associated to cryptocurrency. He instructed CNBC Monday:
I believe a part of what occurred was that regulators needed to ship a really robust anti-crypto message.
“We became the poster boy because there was no insolvency based on the fundamentals,” he opined.
In September final yr, the cryptocurrency sector accounted for practically 25% of Signature Bank’s complete deposits. However, the financial institution mentioned in December that it plans to scale back crypto-related deposits by $8 billion.
Responding to claims that the closure of Signature Bank was crypto-related, a spokesperson for the New York State Department of Financial Services instructed Fortune:
The choices remodeled the weekend had nothing to do with crypto. The choice to take possession of the financial institution and hand it over to the FDIC [Federal Deposit Insurance Corporation] was based mostly on the present standing of the financial institution and its potential to do enterprise in a secure and sound method on Monday.
The NYDFS spokesperson additional shared that withdrawal requests ballooned over the weekend however Signature Bank failed to present dependable and constant information.
Regarding crypto, the spokesperson said that the NYDFS “has been facilitating well-regulated crypto activities for several years, and is a national model for regulating the space.”
Frank expressed shock on the New York state regulator’s assertion that its choice to take possession of Signature Bank was unrelated to cryptocurrency. Claiming that to his data, the financial institution’s executives have been working to present information to regulators, he insisted:
I believe that [crypto] was an element … I’m puzzled as to why it [Signature Bank] was closed.
“What we heard from our executives is that the deposit situation had stabilized and they would be getting the capital from the discount window and I continue to be convinced that if we had opened on Monday given the announcements of those two policies, we would have been in a reasonably good shape and certainly functional,” the previous congressman claimed.
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