NYDFS officer: Crypto investors not to be blamed for Signature Bank collapse

NYDFS officer: Crypto investors not to be blamed for Signature Bank collapse

On 19th April, the United States Financial Services Committee declined the crypto factor behind the collapse of the Signature Bank. In March, the collapse of the three biggest banks, the Silvergate Bank, the Silicon Valley bank Bank, and the Signature Bank in the United States sent shockwaves throughout the world. 

According to reports, New York State Department of Financial Services (NYDFS) Superintendent Adrienne Harris denied any relationship of cryptocurrencies behind the collapse of the Signature bank. Previously, it’s speculated that crypto depositors were the main reason for the fall. Harris refuted any linkage between the crypto and the collapse of the Signature Bank. Additionally, he informed that cryptocurrency depositors are not solely responsible for the fall down but for withdrawing their funds from the bank. 

“It is a misnomer that the failure of Signature Bank was related to crypto,” Harris said. Several depositors have pulled out their assets from the Signature Bank and it sparked a sharp liquidity crisis at the bank. According to Adrienne Harris, blaming cryptocurrencies is a big mistake. 

Before this testimony, on 5 April Adrienne Harris clarified all the speculations that had been running around the collapse of the Signature Bank. She denied the claims for crypto relations in the collapse. Previously, other members of NYDFS slammed the reports of crypto linkages with the collapse. 

On 12th March, the New York Department of Financial Services shut down the Signature Bank and appointed the Federal Deposit and Corporation (FDIC) as a receiver. According to reports, the FDIC took control of its $110 billion in assets and over $82 billion in deposits. The Signature Bank was the second major bank that failed after the two days of Silicon Valley Bank on March 10. Similar to Silicon Valley Bank, the FDIC transferred all of Signature’s assets and deposits to Signature Bridge Bank, a new full-service institution it established. 

The debate heated up when former United States representative Barney Frank said that the takeover of the Signature Bank has alarmed common people to stay away from crypto. “This was just a way to tell people, ‘We don’t want you dealing with crypto,’” Frank said in an interview. 

However, despite having sufficient proof that there’s no linkage between crypto deposits and bank shutdowns, many people are still trying to blame crypto for the collapse. On 12th March, a New York Times article accused crypto behind the shutdown. Adrienne Harris tried everything to remove the doubts from the clients that crypto had no relation to the collapse of Signature Bank. But it’s yet to witness whether she will succeed in convincing or the rumors will be more dominant as time passes. 

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