Senators Accuse Bank Executives Of Blaming Crypto, Pocketing Millions

A former Signature Bank executive has been slammed for trying to pin the blame for his bank’s collapse on cryptocurrency while reportedly being able to make millions in bonuses and stock options.

During a Senate Banking Committee hearing on May 16, United States Senator Cynthia Lummis lashed out at Scott Shaye, the former president of the now-defunct bank, regarding a prepared statement that led to the collapse of his bank.

in his testimonyShay noted that the bank began accepting deposits from businesses in the digital asset space in 2018 and then “significantly” reduced its digital asset deposits in 2022 as the industry turned volatile.

He added that his bank was seized by regulators following the collapse of a “bank with strong ties to the digital asset sector,” which led to $16 billion being withdrawn from Signature.

“There seems to be a lot of deflection of blame on those particular depositories and regulators that deal in digital assets and regulators, but you have accepted no blame yourself,” Lummis said.

Shay, however, refused to point fingers at the digital asset during the Senate hearing.

Loomis replied, “You use that word 10 times during your testimony.”

‘keeping millions’

During another part of the hearing, Senator Elizabeth Warren destroyed Gregory Peker, CEO of Silicon Valley Bank (SVB), and Shay of Signature Bank, for allegedly “recklessly keeping millions after crashing the banks”.

“Right now, the law says that people like Mr. Baker and Mr. Shay (…) can pay themselves millions of dollars in bonuses and stock options, and when the banks blow up, Mr. Baker and Mr. Shay get to keep all the money. Go. And that’s just wrong.”

“If we don’t fix this, every CEO for these multibillion-dollar banks will load up on the risks and have the authority to blow up the banks, and everyone else will have to pay for it.”

Warren noted that she is working within a bipartisan group on the Banking Committee to introduce a bill that could stop “these crazy paychecks.”

Cointelegraph reached out to Shay and Baker for comment but did not receive an immediate response.

Connected: Signature Bank Failed to Understand the Risks Associated with Crypto: FDIC Chairman

In April, New York Department of Financial Services (NYDFS) superintendent Adrienne Harris reportedly said it was “ridiculous” that crypto could be blamed for the collapse of Signature Banks.

During a Chainalysis Link conference in New York City, she said that the events leading to Signature’s failure were instead a “new-age bank run”.

The NYDFS took control of Signature Bank on March 12, claiming it was protecting the US economy from “systemic risks”. The bank was the latest failure following the collapse of crypto-friendly Silvergate Bank and SVB.

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