Signature Bank Closure Has Nothing to Do With Crypto, Says Regulator – Finance Bitcoin News
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The recent closure of accounts held by New York-based Signature Bank has sparked speculation that the decision was related to the bank’s involvement in the cryptocurrency sector. However, according to a statement by a top banking regulator, this is not the case.
The New York State Department of Financial Services (NYDFS) clarified that Signature Bank’s decision to close the accounts of certain customers was due to their failure to comply with the bank’s anti-money laundering (AML) regulations and not related to their use of cryptocurrency.
According to the NYDFS, the bank had given its customers ample warning and opportunities to comply with its AML policies, but some failed to do so. The regulator noted that financial institutions have a duty to maintain a robust AML program to prevent money laundering, terrorist financing, and other forms of financial crime.
The NYDFS also emphasized that it encourages innovation and the use of new technologies like cryptocurrencies, stating that it “is committed to fostering responsible innovation in financial services, including virtual currencies.”
Signature Bank is known for its involvement in the cryptocurrency space, having previously launched a platform for institutional clients to invest in digital assets. The bank also provides banking services to several cryptocurrency exchanges, including Gemini and Bitstamp.
The closure of the bank’s accounts had raised concerns among the cryptocurrency community, as it was seen as yet another example of the difficulties faced by businesses operating in the sector. Several banks and financial institutions worldwide have been hesitant to offer services to cryptocurrency companies due to perceived regulatory and legal risks.
However, the NYDFS’s statement suggests that the decision to close the accounts was related to AML compliance and not specifically related to cryptocurrency. This clarification may assuage concerns and encourage more banks to engage with the sector.
In conclusion, the NYDFS’s statement regarding Signature Bank’s closure of accounts indicates that the decision was not directly related to cryptocurrency. It reinforces the importance of banks and financial institutions implementing robust AML programs to prevent financial crime, but also highlights the regulator’s support for responsible innovation in the financial services sector, including the use of cryptocurrencies. The clarification should provide some comfort to the cryptocurrency industry and encourage more banks to engage with the sector.
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