Bitcoin (BTC) enthusiast and US Senator Cynthia Lummis is slamming the former chairman of collapsed Signature Bank, alleging that the executive is avoiding taking responsibility for the institution’s demise.
In a Senate Banking Committee hearing, the Wyoming Republican tells former Signature Bank chair, Scott Shay, that he and his colleagues may be unfairly “deflecting blame” onto the digital asset industry, rather than the bank’s own negligence.
Signature Bank was one of the few crypto-friendly banks in the US before its disintegration and had worked with several heavyweights in the industry, including Tether, the world’s largest stablecoin issuer, and Binance, the world’s largest crypto exchange by volume.
Following the institution’s collapse, there were heavy implications that Signature Bank’s downfall stemmed from its association with the crypto industry.
In Shay’s testimony regarding the collapse of Signature Bank, he mentioned that events during the crypto bear market of 2022 had an influence on the bank’s struggles.
“In the latter part of 2022, the digital asset sector experienced increased volatility and regulators expressed concern. Signature Bank took these developments seriously and, in just a few months, significantly reduced its digital asset deposits.
Unfortunately, a series of truly extraordinary and unprecedented events unfolded quickly…Â
Nonetheless, I was confident that Signature Bank could withstand the economic earthquake that occurred on that day. The bank was well-capitalized. The bank was solvent – indeed, it was always solvent, with assets well in excess of liabilities even at the very end. And the bank had a well-defined and solid plan to continue in operation and withstand additional withdrawals. Although I believed that the bank was in a strong position to weather the storm, regulators evidently saw things differently. On Sunday, March 12, regulators seized Signature Bank.”
Grilling Shay, Senator Lummis says she’s concerned that the banking executive was almost exclusively focusing on the digital asset sector rather than the bank’s own practices.
“You said it was a devastating day for you. I’m sure it was. It also was for your employees and your depositors. I am a proponent of state-chartered banks. I’m a proponent of digital asset industries.
It looks like there’s been a lot of deflection of blame onto those particular depositors that deal in digital assets, and onto regulators. But you haven’t accepted any blame yourself, and so I find that disconcerting and disappointing. I know you’re profoundly disappointed. I can assure you that your depositors are as well.”
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