The Superintendent of the New York State Division of Monetary Companies (NYDFS), Adrienne Harris, has refuted allegations that cryptocurrency depositors had been liable for the collapse of Signature Financial institution.
At a listening to about stablecoins held by the Home Monetary Companies Committee on April 18, Harris acknowledged that the liquidity disaster that led to Signature Financial institution’s collapse was not precipitated solely by cryptocurrency depositors, however by varied depositors withdrawing their funds from the financial institution, Bloomberg reported.
Harris reiterated her stance on cryptocurrencies in the course of the listening to, dismissing the notion that they had been liable for the financial institution’s failure and calling it a “misnomer.”
That is consistent with her earlier feedback on the Hyperlinks NYC convention, the place she defended cryptocurrencies and expressed skepticism towards authorities officers who criticized them.
Signature’s crypto shoppers
Superintendent Harris acknowledged that solely 20% of depositors at Signature Financial institution had been cryptocurrency shoppers, and 20% of all depositors withdrew their belongings, which led to the financial institution’s liquidity disaster.
“The outflow of crypto deposits had been in precise proportion to the illustration within the depositor base total.”
Signature Financial institution’s depositors who withdrew their funds and contributed to the financial institution’s liquidity disaster got here from varied sectors, together with the crypto trade, meals distributors, fiduciaries, trusts, and regulation corporations, based on Superintendent Harris.
The financial institution had beforehand acknowledged plans to scale back providers for the crypto trade on account of regulatory stress and challenges throughout the digital asset sector. Regulators took management of the financial institution after outflows reached billions of {dollars} throughout a large financial institution run.
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