The Superintendent of the New York State Department of Financial Services (NYDFS), Adrienne Harris, has refuted allegations that cryptocurrency depositors were responsible for the collapse of Signature Bank.
At a hearing about stablecoins held by the House Financial Services Committee on April 18, Harris stated that the liquidity crisis that led to Signature Bank’s collapse was not caused solely by cryptocurrency depositors, but by various depositors withdrawing their funds from the bank, Bloomberg reported.
Harris reiterated her stance on cryptocurrencies during the hearing, dismissing the notion that they were responsible for the bank’s failure and calling it a “misnomer.”
This is in line with her earlier comments at the Links NYC conference, where she defended cryptocurrencies and expressed skepticism toward government officials who criticized them.
Signature’s crypto clients
Superintendent Harris stated that only 20% of depositors at Signature Bank were cryptocurrency clients, and 20% of all depositors withdrew their assets, which led to the bank’s liquidity crisis.
“The outflow of crypto deposits were in exact proportion to the representation in the depositor base overall.”
Signature Bank’s depositors who withdrew their funds and contributed to the bank’s liquidity crisis came from various sectors, including the crypto industry, food vendors, fiduciaries, trusts, and law firms, according to Superintendent Harris.
The bank had previously stated plans to reduce services for the crypto industry due to regulatory pressure and challenges within the digital asset sector. Regulators took control of the bank after outflows reached billions of dollars during a massive bank run.
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