In a fiery Senate Banking Committee hearing, former Signature Bank chairman Scott Shay faced scathing criticism for seemingly deflecting blame onto the crypto industry while allegedly pocketing millions in bounties and stock choices as his bank collapsed. Senator Cynthia Lummis didn’t hold back, highlighting Shay’s repeated mention of digital assets in his prepared report on the bank’s downfall, media reports said.
Shay admitted that Signature Bank had started accepting depositions from digital asset businesses in 2018 but significantly reduced such deposits in 2022 due to industry volatility. He pointed to the collapse of another bank with ties to the digital investment sector, which led regulators to seize Signature Bank and triggered a massive $16 billion withdrawal.
Senator Lummis called out Shay’s attempt to shift blame onto digital assets, stating, “”It appears that there has been a significant effort to shift the blame onto depositors involved in digital assets and regulators, while neglecting to take any responsibility yourself.” Shay denied specifically blaming digital assets, but Lummis pointed out that he had mentioned them ten times in his testimony.
In a separate exchange, Senator Elizabeth Warren lambasted Gregory Becker, CEO of Silicon Valley Bank, and Shay for allegedly holding millions of dollars in stock options and bonuses after recklessly crashing banks. Warren argued that the current laws allow CEOs to benefit while others pay the price for bank failures. She made a commitment to collaborate with a bipartisan group within the Banking Committee in order to propose a bill to address this issue and reclaim excessive executive compensation.
Signature Bank’s collapse has faced scrutiny beyond the Senate hearing. Adrienne Harris, superintendent of the New York Department of Financial Services, dismissed blaming crypto for the bank’s failure as “ludicrous.” She attributed the collapse to a “new-fashioned bank run” rather than the influence of digital assets.