Critics are calling out a former executive of collapsed Signature Bank for potentially attempting to shift blame for the failure of the bank to the cryptocurrency industry.
US Senator Cynthia Lummis passionately challenged Scott Shay, the former Chair of Signature Bank, during the Senate Banking Committee hearing on Tuesday, May 16th. In reference to his previous statement, she directly questioned him about whether Signature Bank had been holding digital assets.
In his prepared testimony, Scott Shay recounted the extraordinary events that took place on Monday, emphasizing the significance of digital assets 10 times in relation to the bank’s collapse.
Scott Shay confirmed to Senator Lummis that all deposits from the digital asset industry were made in cash (specifically US Dollars) and not in cryptocurrency. This aligns with Shay’s earlier testimony where he mentioned that the bank began accepting deposits from digital asset businesses in 2018 but later reduced them significantly in 2022 due to industry volatility.
According to him, Signature Bank was seized by regulators following the collapse of another bank with close connections to the digital asset sector. This unfortunate event resulted in a staggering $16 billion being withdrawn from Signature Bank.
In her closing remarks, Lummis pointed out, “It looks like there has 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.”
Despite being depositors in the digital assets industry and not engaging in the holding or trading of digital assets through the bank, Shay placed the blame for the bank closure on digital assets.
