Signature Bank was an American commercial bank which has since closed its doors to the public owing to its closure by authorities. The bank was headquartered in New York with over 40 private client offices in states including California. Nevada, North Carolina and Connecticut. When the bank was still operational, it offered services ranging from personalized banking and credit services to powerful cash management systems and flexible financing to businesses. The news regarding the closure of signature bank broke the internet within few days after the closure of Silicon Valley Bank therefore, leading many among the crypto community to believe that regulators were conducting a crypto crack down seeing as the closed banks were the largest crypto financiers in the US. However, this could not have been more far from the real reason that warranted their closure – at least according to the New York regulator.
According to the superintendent of NYDFS(New York Department of Financial Services), the idea that the closure of Signature Bank was in away a crackdown on crypto is quite ludicrous and bullish on crypto. The superintendent, Adrienne Harris, was speaking earlier this week, on Wednesday, at a crypto event hosted by blockchain analytics firm Chainanalysis, where she said that the decision to close down Signature Bank was due to liquidity issues rather than its clients in the crypto industry. The recent crypto crackdown has been dabbed ‘ Choke Point 2.0’ by the crypto community and it is being led by US regulators. Adrienne has however, dismissed claims that the recent closure was part of operation Choke Point 2.0. The name is derived from the original Operation Choke Point Initiative that pressured banks that served gun manufacturers and other legal but undesirable industries.
While speaking at the event, the superintendent also observed that many crypto firms lack compliance programs and maturity even as they continue to grow tremendously. She commented that she is looking forward to a time when the crypto industry will have matured in operations as witnessed on the business side. She also named a few areas that need maturity including anti-money laundering act, bank secrecy and cybersecurity. It is important to note that under her leadership, the NYDFS has grown its cyber unit to more than 50 employees. She also hopes to use New York’s role as an industry leader to set the foundation for crypto regulation nationwide.
Signature Bank was the third biggest bank failure inn 2023 after Silicon Valley Bank and Silvergate bank that were heavily crypto-friendly. Silvergate has since entered liquidation. After the closure of Signature Bank, the deposits in the bank were transferred to the newly formed Signature Bridge Bank with US agencies including The Federal Reserve, FDIC(Federal Deposits Insurance Corp) and the US Treasury Department releasing a joint statement that all deposits in Signature Bank will be guaranteed but not at the expense of tax-payers money. Whether the remarks made by by Adrienne Harris are true is another story. Only time and circumstances will tell.
