A former bank executive of Signature Bank has faced scathing remarks and criticism for apparently trying to fault the collapse of his bank on cryptocurrency. During the blame, the bank executive has also allegedly gained millions via stock options and bonuses.
An Easy Target For Bank Executives?
On May 16th, a hearing was held by the Senate Banking Committee on the matter of the recent bank collapses. Cynthia Lummis, the Senator of the United States, harshly rebuked Scott Shay, one of the former bank executives associated with Signature which is now defunct. The rebuke came when the bank executive read out his prepared statement regarding what can be the possible fault behind the collapse of his bank.
In Shay’s testimony, the bank executive said that Signature originally began to accept deposits from clients related to the sector of digital assets in 2018. In 2022, he claimed that the deposits related to digital assets were significantly reduced due to the volatility experienced by the industry.
Shay, the executive, continued by claiming that regulators seized his bank only after another bank that had strong connections with the sector of digital assets collapsed. This, he points out, saw a withdrawal of $16Bn from Signature.
To this, Lummis replied that there appears to be plentiful blame deflection towards these selective depositions that are associated with digital assets as well as regulators. As such, she is yet to hear Shay accept any of the blame himself. The bank executive then tried to deny that he pointed any blame towards digital assets during his hearing at the Senate. However, Lummis responded by pointing out that Shay’s testimony included the term ten times. In a different section of the hearing, Elizabeth Warren, another Senator, also gave her harsh rebuke towards Shay and Gregory Pecker, the CEO of Silicon Valley Bank.