Good morning, Broadsheet readers! Jacinda Ardern gives her last speech as a member of the New Zealand Parliament, Jill Biden will lead the U.S. delegation to King Charles's coronation, and Fortune crypto reporter Leo Schwartz explains why a financial regulator is stepping into the limelight. Have a thoughtful Thursday.
- In focus. Financial regulators try to avoid the limelight, which usually only shines when something has gone horribly awry. But it seems to be following around Adrienne Harris, the superintendent of the New York Department of Financial Services.
As the principal regulator for the financial capital of the world, the DFS is an unusually powerful state agency, combining broad oversight powers that are more parceled out at the federal level. Harris is responsible for everything from New York’s biggest state banks to student loan providers to the topsy-turvy crypto sector.
A veteran of the Treasury Department and the Obama administration, Harris became the first Black woman to lead the DFS when she was sworn in at the beginning of 2022. Despite her impressive background, Harris was placed in a nearly impossible position. As a state agency, the DFS’s mission is not only market resilience and consumer protection, but also to promote economic growth in New York. For Harris, that has meant nurturing the state’s burgeoning crypto industry, which it attracted thanks to its nation-leading approach to granting operating licenses to digital asset companies.
Harris has shown aplomb in wrangling the renegade industry, expanding her department’s crypto team, and handing down enforcement actions against industry leaders like Coinbase. In the wake of November’s spectacular collapse of FTX, as many policymakers and regulators have distanced themselves from the sector, Harris has demonstrated a willingness to continue working with companies while ensuring that New York doesn’t offer safe haven to the next Sam Bankman-Fried. In February, she waded deeper into the muck after becoming the first U.S. agency to target Binance, the stateless exchange that has become a focus for global regulators.
Her most decisive—and divisive—action came last month, in the midst of the worst U.S. banking crisis since 2008. After Silvergate voluntarily liquidated and Silicon Valley Bank failed, all eyes turned to Signature, a crypto-friendly bank with a New York charter that fell under Harris’s jurisdiction. Two days after SVB collapsed, Harris announced that DFS would seize Signature, a move that quickly became a lightning rod as many—including board member Barney Frank—accused her of targeting the bank because of its crypto ties, an accusation she described as “ludicrous.”
The controversy has not seemed to faze Harris, who has her head down regulating the DFS’s massive portfolio. “That’s the key with any sort of new innovation, is how can you foster responsible, useful innovation and protect consumers and markets from bad actors,” Harris told me earlier this year. “You have troubling times, and it’s not an easy thing to do as a policymaker, but that’s the job.”
Read the full story from Fortune's April/May issue here. You can follow more of Leo's work and keep up with the latest in crypto regulation by subscribing to the Fortune Crypto newsletter to get his Wednesday column, Proof of State, delivered free to your inbox.
Leo Schwartz
leo.schwartz@fortune.com
@leomschwartz
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