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Signature Bank’s high-profile closure last month happened due to liquidity issues rather than a regulatory agenda against crypto, according to Adrienne A. Harris, the superintendent of the New York State Department of Financial Services (NYDFS).
Harris spoke at the Chainalysis Links Conference this week, and told onlookers that it is a “really ludicrous” idea that the NYDFS took possession of Signature due to the bank’s association with crypto, The Wall Street Journal reported.
The state regulator shuttered the crypto-friendly financial institution earlier in March after customers withdrew $10 billion worth of deposits in a single day. The NYDFS then appointed the Federal Deposit Insurance Corporate (FDIC) to run a “bridge bank” holding all of Signature’s assets until it could be sold off.
Signature Bank board member Barney Frank, a former Democratic congressman from Massachusetts, told CNBC at the time that he thought the bank’s closure was part of a regulatory crackdown on crypto.
Later that month, the FDIC entered into a “purchase and assumption agreement” with Flagstar Bank, a subsidiary of New York Community Bancorp.
The press release announcing the deal stated it was worth $38.4 billion, which includes “substantially all deposits and certain loan portfolios” of the failed bank.
The terms, however, did not include Signature’s approximately $4 billion of deposits related to its digital-assets banking business. The FDIC said it would provide the deposits directly to those customers.
Prior to the deal, Reuters reported that the FDIC had required any banks interested in acquiring Signature to agree to give up all of the company’s businesses that were related to crypto.
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Featured Image: Shutterstock/Ociacia/Andy Chipus/Vladimir Sazonov
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