The superintendent in charge of the New York State Department of Financial Services (NYDFS) has dismissed claims that Signature bank’s closure was related to its dealings with cryptocurrency companies, deeming such allegations as absurd.
Adrienne A. Harris clarified that the actual reason for the bank’s shutdown was the presence of numerous uninsured deposits and the absence of liquidity management protocols to facilitate withdrawal requests.
She further asserted that the NYDFS had previously urged companies to segregate their clients’ crypto assets from their own assets to safeguard them from financial losses.
Additionally, the agency has mandated custodial services to transparently disclose information and ensure easy access to client agreements in accordance with New York State laws.
Notwithstanding her statement, the NYDFS superintendent remains of the opinion that the crypto industry is not yet fully mature, even though it is gaining popularity.
According to Harris, several crypto companies fail to adhere to the Bank Secrecy Act and anti-money laundering (AML) requirements.
Furthermore, many of them would benefit from enhancing their cybersecurity to prevent cyber-attacks.
As a result, firms utilizing the latest technology must recruit personnel with specialized training. Signature Bank encountered serious financial difficulties last month, resulting in its closure by US regulators.
The US Federal Deposit Insurance Corporation (FDIC) announced that the bankrupt bank’s crypto customers had until April 5 to close their accounts and withdraw their funds.
Late last year, Harris suggested levying a fee on licensed crypto companies to regulate their operations.