US Sen. Cynthia Lummis Criticizes Signature Bank Executive for Blaming Crypto for Its Downfall
Sen. Cynthia Lummis said she found it disappointing that a former crypto-friendly Signature Bank executive is not taking the blame for the failed bank, while criticizing his wordiness about crypto.
The Wyoming Republican, who has advocated for crypto, questioned Signature Bank’s former Chairman Scott Shay and former President Eric Howell on Tuesday at a Senate Banking Committee hearing.
“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,” Lummis said.
Signature Bank failed in March — one of three banks, including Silicon Valley Bank, to fail within days of each other.
Former Silicon Valley Bank CEO Gregory Becker also testified on Tuesday at the hearing.
The New York Department of Financial Services announced on March 12 that it had taken possession of Signature Bank to protect depositors.
In prepared testimony, Shay noted digital assets’ volatility and regulators’ concerns and said the bank then took steps to “significantly reduce its digital asset deposits.”
“Unfortunately, a series of truly extraordinary and unprecedented events unfolded quickly,” Shay said. “On March 7, a bank with strong ties to the digital asset sector announced it was going out of business, and three days later, on March 10, a second bank was seized by regulators. And then, within just a few hours, our depositors withdrew $16 billion from the bank.”
Lummis noted Shay’s use of digital assets in that testimony on Tuesday,
Shay said he did not point to digital assets being a particular cause or not.
“You mentioned in your testimony digital assets 10 times implying that digital assets were a driver of Signature Bank’s collapse,” Lummis said.
Some crypto advocates on Twitter have blamed the government for intentionally targeting the crypto sector with bank closures.
NYDFS Superintendent Adrienne Harris pushed back on that sentiment, speaking on Signature Bank at a conference last month.
“The idea that the taking possession of Signature was about crypto and this is ‘Choke Point 2.0’ is really ludicrous,” Harris was quoted as saying at the conference.