Linking Signature Bank Collapse To Crypto Exposure 'Ludicrous,' Says NY Finance Regulator

Adrienne Harris, superintendent of the New York Department of Financial Services, on Wednesday, said that the closure of Signature Bank in March was not due to its exposure to cryptocurrency. 

What Happened: Harris made the statement at the Chainalysis Links conference in New York City. According to a report by The Wall Street Journal, she described the bank’s failure as a “new-fashioned bank run” and dismissed the notion that it had any relation to its crypto exposure as being “ludicrous.”

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Harris went on to challenge the idea that the U.S. government was working to limit certain industries' access to banking services. This has been referred to as “Operation Choke Point 2.0.”

The original Operation Choke Point, implemented from 2013 to 2017 by the U.S. Department of Justice, aimed to target banks suspected of having exposure to companies that were potentially involved in fraud or money laundering.

Harris’ remarks came amid a push by regulators and lawmakers to investigate and regulate the crypto industry.

As per the report, Harris discussed the crypto industry’s lack of maturity in its compliance programs even as it has grown in prominence.

She noted that despite the rapid growth of the crypto industry, there are still issues around compliance programs, including a “lack of maturity around Bank Secrecy Act-anti-money-laundering [compliance] and cybersecurity.”

Harris added that her team often discovered companies whose compliance programs consisted solely of “reams of paper” and Excel spreadsheets. 

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