According to the regulator, Signature Bank’s closure has nothing to do with cryptocurrencies
As the New York State Department of Financial Services (NYDFS) took custody of Signature Bank on Sunday, there have been concerns questioning whether the regulatory action was tied to bitcoin.
Former U.S. Representative Barney Frank, who worked on the Dodd-Frank Act’s development and had served on the board of Signature Bank since 2015, thinks that the regulator’s action had anything to do with cryptocurrencies. He said on Monday on CNBC:
He thinks part of what happened was that regulators wanted to send a very strong anti-crypto message. In September of last year, over 25% of Signature Bank’s total deposits came from the cryptocurrency industry. Yet, the bank announced in December that it intended to cut $8 billion worth of crypto-related deposits.
A representative for the New York State Commissioner of Financial Services responded to suggestions that the liquidation of Signature Bank was connected to cryptocurrency by saying:
The choices made over the weekend were unrelated to cryptocurrency. Based on the bank’s present condition and capacity to conduct business in a safe and sound way on Monday, the decision was made to seize the bank and turn it over to the FDIC [Federal Deposit Insurance Corporation]. The NYDFS official also stated that withdrawal requests spiked over the weekend but that credible and consistent data was not provided by Signature Bank.
Frank expressed amazement at the New York state regulator’s claim that cryptocurrencies had nothing to do with its move to seize control of Signature Bank. He asserted that, as far as he knew, bank executives were attempting to disclose information to authorities.
“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 former congressman claimed.
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