Speaking before the US House of Representatives Financial Services Committee on Wednesday, New York State Department of Financial Services Superintendent Adrienne Harris denied that cryptocurrency depositors caused the failure of Signature Bank. On the contrary, depositors in many asset classes and businesses have pulled out, Harris said. This sparked a fatal liquidity crisis in the ailing bank. Blaming cryptocurrency is a bad mistake.
“It is a misnomer that the signature bank failure has to do with crypto,” Harris testified, according to a Bloomberg report.
Harris’ comments echoed points she made at the Links NYC conference on April 5. At that event, Harris emerged as an advocate for cryptocurrency. and skeptical of the government who challenge its legitimacy. Harris denied that the regulators’ hostility to cryptocurrency led to the crash. She described the event as a “new-style bank run,” according to The Wall Street Journal.
It wasn’t just these $4 billion total cryptocurrency customers who wanted out. Instead, a broad swath of Signature’s customers panicked and the bank sank in withdrawals.
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Despite these documented facts, crypto enemies have tried to use the Signature failure as a club to crush the industry. On March 12, Matthew Goldstein and Emily Flitter, in a New York Times article, blamed cryptocurrency. The article invited the signature to the outside in this regard.
“Signature was one of the few financial institutions that opened its doors to take crypto-asset deposits, a company I entered in 2018,” Goldstein and Flitter wrote.
“It ended up being a fateful decision because the bottom fell off crypto assets after the downfall of FTX and the ensuing criminal investigation. Goldstein and Farber added:
Harris’ comments on Wednesday echoed points made at the Links NYC event. But this time, she offered it to lawmakers while overseeing the economy. Moreover, Harris heads a division that claims to oversee around 3,000 financial institutions with assets worth $8.8 trillion.
Time will tell whether Harris has succeeded in correcting the negative perceptions stoked by articles such as the New York Times article.
BeInCrypto has reached out to Harris’s office for comment.
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