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

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

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Adrian Harris, superintendent of the New York State Department of Financial Services (NYDFS), has refuted claims that cryptocurrency depositors are responsible for the collapse of signatory banks.

At a hearing on stablecoins held by the House Financial Services Committee on April 18, Harris said the liquidity crisis that led to the failure of signatory banks was not solely caused by crypto depositors, but also by banks. Said it was caused by various depositors withdrawing funds. report.

Harris reiterated his stance on cryptocurrencies at the hearing, dismissing the notion that cryptocurrencies were responsible for bank failures, calling it a “misnomer.”

This is in line with her earlier comments at the Links NYC conference, where she defended cryptocurrencies and expressed skepticism about government officials who criticized them.

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Harris said only 20% of Signature Bank’s depositors were cryptocurrency customers and 20% of all depositors withdrew their assets, leading to a liquidity crisis at the bank.

“Crypto deposit outflows were precisely proportional to the overall depositor base representation.”

According to Inspector Harris, the undersigned bank depositors who withdrew funds and contributed to the bank’s liquidity crisis came from a variety of sectors, including the crypto industry, food vendors, trustees, trusts and law firms.

The bank had previously announced plans to cut services for the crypto industry due to regulatory pressure and challenges within the digital asset sector. Regulators took control of banks after outflows reached billions during large bank runs.

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