Bitcoin (BTC) enthusiast and US Senator Cynthia Lummis has denounced the former chairman of the collapsed Signature Bank, claiming that the executive is evading responsibility for the institution’s demise.
At a Senate Banking Committee hearing, the Wyoming Republican tells former Signature Bank chairman Scott Shay that he and his colleagues may be unfairly “placing the blame” on the digital asset industry, rather than on its own. negligence of the bank.
Signature Bank was one of the few crypto-friendly banks in the US prior to its disintegration and had partnered with several industry heavyweights, including Tether, the world’s largest stablecoin issuer, and Binance, the world’s largest crypto exchange by volume.
After the collapse of the institution, there were heavy implications that Signature Bank’s demise stemmed from its association with the crypto industry.
In Shay’s testimony about Signature Bank’s collapse, he mentioned that events during the 2022 crypto bear market influenced the bank’s struggles.
“In the second half of 2022, the digital asset sector experienced increased volatility and regulators expressed concern. Signature Bank took these developments seriously and has significantly reduced its digital asset deposits in just a few months.
Unfortunately, a series of truly extraordinary and unprecedented events soon unfolded…
Nevertheless, I was confident that Signature Bank could weather the economic earthquake of that day. The bank was well capitalized. The bank was solvent—in fact, it was always solvent, with assets far outstripping liabilities even at the very last minute. And the bank had a well-defined and solid plan to go ahead and withstand additional withdrawals. While I believed the bank was in a strong position to weather the storm, regulators apparently saw it differently. On Sunday, March 12, regulators seized Signature Bank.”
Senator Lummis grills Shay, saying she is concerned that the bank manager focused almost exclusively 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 was also for your employees and your savers. I am in favor of state chartered banks. I am a supporter of digital asset industries.
It seems that the blame is often shifted onto those specific depositors who deal in digital assets, as well as regulators. But you yourself have not accepted guilt, and so I find that disturbing and disappointing. I know you are deeply disappointed. I can assure you that your savers are too.”
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