Senators slam bank execs for blaming collapses on crypto, pocketing millions

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A former Signature bank executive has been accused of seemingly trying to pin the blame for bank failures on cryptocurrencies, while he was allegedly able to make millions of dollars in bonuses and stock options.

At a May 16 Senate Banking Committee hearing, U.S. Senator Cynthia Lumis lashed out at former chairman Scott Shay of the now-defunct bank in connection with a statement she had prepared about the causes of the bank’s collapse. bottom.

in him testimonyShea noted that the bank began accepting deposits from companies in the digital assets sector in 2018, but has since cut its digital assets deposits “significantly” in 2022 as the industry experienced volatility. .

He said the bankruptcy of “a bank with strong ties to the digital assets sector” led to regulators foreclosing on his bank and subsequently withdrawing $16 billion from Signature.

“There seems to have been a lot of blame shifting to certain depositors and regulators who trade digital assets, but you yourself have not accepted any responsibility,” Lumis said.

However, Shea denied pointing the finger at digital assets during a Senate hearing.

“You used that word ten times in your testimony,” Lumis replied.

“Keep Millions of Dollars”

At another part of the hearing, Senator Elizabeth Warren said, blown up Gregory Pecker, CEO of Silicon Valley Bank (SVB) and Shay, the signature bank, are said to have “kept millions of dollars after recklessly busting the bank.”

“Now the law says people like Mr Becker and Mr Shay can […] They can pay themselves tens of millions of dollars in bonuses and stock options, and if the bank fails, Becker and Shea can keep the full amount. And that’s plain wrong. ”

“If we don’t fix the problem, all the CEOs of these multi-billion dollar banks will continue to pile up risks and destroy their banks, and everyone else will have to pay the price. prize.”

Warren said he was working on a bill within the Banking Commission’s bipartisan group that could bring back “those crazy salaries.”

Shea and Becker did not immediately respond to Cointelegraph’s request for comment.

Related: Signature Bank failed to understand risks associated with cryptocurrencies: FDIC chairman

New York Department of Financial Services (NYDFS) supervisor Adrian Harris reportedly said in April that blaming cryptocurrencies for signature bank failures was “silly.”

At the Chainalysis Links conference in New York City, she said the events leading up to Signature’s failure were rather “a new way of mounting.”

The NYDFS took control of its signature bank on March 12, claiming it was protecting the U.S. economy from “systemic risk.” The bank is the latest to fail following the failures of crypto-friendly Silvergate Bank and SVB.

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