Adrienne A. Harris, the head of the New York State Department of Financial Services (DFS), has dismissed any association between the closure of Signature Bank and its crypto banking operations. According to Harris, the bank was closed due to a high percentage of uninsured deposits and a lack of liquidity to meet withdrawal requests. Harris made these remarks at an event organized by blockchain analysis firm, Chainalysis, where she also refuted claims that the move was aimed at stifling the crypto industry. She also highlighted a lack of maturity in the industry's compliance programs regarding Bank Secrecy Act-anti-money laundering and cybersecurity, adding that she hoped that these systems would mature as the business side does.
In a report, the Wall Street Journal stated that DFS is set to finalize regulations that would give it the power to assess the crypto industry, which would enable DFS to align its regulation of the crypto sector with the insurance and banking sectors. Harris disclosed that fees paid by companies for their examinations would be added to DFS's resources.
DFS has been actively regulating the crypto industry by licensing and regulating crypto firms operating in the state and enforcing strict cybersecurity measures. In 2015, DFS created the BitLicense, which has been widely criticized by the crypto industry for being too strict and impeding innovation. However, aligning the assessment of the crypto industry with other financial sectors may potentially allay concerns about BitLicense and other strict regulations. Despite Harris denying that the closure of Signature Bank had anything to do with crypto banking, the industry remains apprehensive about regulatory crackdowns, particularly in the US, where there have been increased efforts to regulate the sector.
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