- New York Finance Regulator Clarifies: Signature Bank Shutdown Unrelated to Crypto Activities.
- Superintendent Adrienne Harris: The idea that the closure of Signature Bank was an attempt to target the crypto sector is “ludicrous.”
- Operation Choke Point 2.0: Many crypto firms lack maturity in their compliance programs even as they have grown in prominence.
New York Finance Regulator Clarifies Signature Bank Shutdown Unrelated to Crypto Activities
The New York Department of Financial Services (NYDFS) Superintendent Adrienne Harris has clarified that the regulator’s decision to close down Signature Bank last month was due to the bank’s liquidity issues rather than its clients in the crypto industry. She stated that the idea that it was related to Operation Choke Point 2.0, a crackdown on crypto by US regulators, was “ludicrous,” at the Links NYC conference hosted by blockchain analytics firm Chainalysis.
Operation Choke Point 2.0 Not Real
Harris pointed out at the conference that many companies’ compliance programs consisted of “reams of paper” and Excel spreadsheets, and there was still a lack of maturity around Bank Secrecy Act-anti-money-laundering compliance and cybersecurity. She also noted that under her leadership, NYDFS had increased staffing in its digital asset unit which now employs more than 50 people and hopes to set regulatory agenda for crypto nationwide.
Signature Bank Closure Unrelated To Crypto Industry
It is important to note that Signature Bank was not closed due to any involvement with cryptocurrency activities but due to liquidity issues instead. This follows after two other major banks; Silvergate Capital, a crypto-focused bank, and Silicon Valley Bank, a tech-focused bank both failed earlier this year during what some are calling ‘the banking crisis of 2023’.
Crypto Firms Lack Maturity In Compliance ProgramsDespite increased presence from regulators such as NYDFS , many cryptocurrency firms still lack maturity when it comes to their compliance programs with regards anti money laundering legislation and cybersecurity protocols . This can be seen through how most companies compliance systems consist largely of ‘reams of paper’ or excel spreadsheets meaning much more needs done if these firms want stay compliant with regulations .
< h2 > Conclusion h2 > While Operation Choke Point 2 . 0 may not be real yet , it is clear that many cryptocurrency firms need work on their risk management systems if they want avoid shutdowns or worse . Furthermore , despite recent events , it appears Signature Banks closure had nothing do with cryptocurrency activities but rather its liquidity issues instead .