- New York Department of Financial Services has dismissed any connection between Signature Bank’s closure and crypto industry, providing relief to crypto businesses relying on the bank’s Signet network.
- The closure was due to traditional banking factors and a “new-fashioned bank run.”
- Specific reasons for the bank’s failure are still unclear, leaving many wondering about the bank’s future.
The saga surrounding the closure of Signature Bank has finally ended, and the cryptocurrency community isn’t to blame. Despite rumors to the contrary, the New York Department of Financial Services (NYDFS) has dismissed any connection between the institution’s closure and its ties to the crypto industry.
In a recent speech at the Links NYC conference, NYDFS Superintendent Adrienne A. Harris unequivocally denied that cryptocurrency was the root cause of Signature Bank’s closure. Instead, she attributed the bank’s demise to a “new-fashioned bank run.”
The rumors began circulating when Signature Bank was closed on March 12, prompting speculation that its crypto ties were to blame. However, NYDFS spokespersons have consistently denied any crypto-related issues with the bank, stating that the incident had “nothing to do with crypto.”
The bank had several crypto companies and exchanges relying on its Signet network, including Coinbase, Kraken, and Binance. Despite this, Harris has clarified that cryptocurrency wasn’t the cause of Signature Bank’s closure.
Although the specific reasons for the bank’s closure are still unclear, it’s now apparent that the crypto industry wasn’t to blame. The future of Signature Bank still hangs in the balance, leaving many to wonder what the future holds for this once-prominent institution.
However, it’s a relief for those involved in the crypto industry to know they weren’t at the center of this controversy.
US Authorities Versus Cryptocurrency Continues
The US government has been accused of attempting to choke off crypto by closing off its access to the banking system. Dubbed “Operation Choke Point 2.0,” many in the industry feared the worst. However, these fears have subsided as banks have stepped up to fill the void left by the closure of companies like Silvergate Capital Corp. and Signature.
The NYDFS recently placed Signature Bank into receivership with the Federal Deposit Insurance Corp. to protect depositors. With approximately $4 billion of deposits related to its digital assets banking business, Signature Bank was the third-largest bank to fail in US history. Although the bank’s future remains uncertain, there is one reassuring fact for those in the crypto community: it wasn’t crypto that caused the bank to fail, but rather traditional banking factors.
This should relieve those in the industry worried about the government’s motives. In a statement, Harris confirmed that the rumors of the government’s attempt to stifle crypto by cutting off access to the banking system were unfounded. This should reassure crypto enthusiasts that they can operate without fear of persecution.
Although the NYDFS said such affirmation, regulators are still doing all they can to hold the crypto industry in its place.
