The former Signature Bank executive has been criticized for trying to blame the bank’s bankruptcy on cryptocurrencies, while allegedly pocketing millions of stocks.
United States Senator Cynthia Lummis lashed out during a May 16 session of the Senate Banking Committee for her testimony to Scott Shay, the former chairman of the bankrupt bank, about what led to her bank’s bankruptcy.
Senator Warren Criticizes SVB and Signature Bank Executives
In his statement, Shay stated that the bank has significantly reduced its digital asset deposits in 2022 as the digital asset sector experienced volatility in 2018.
He said that after the bankruptcy of the bank, which has strong ties to the digital asset industry, his bank was seized by regulators, which led to a withdrawal of $16 billion from Signature Bank.
Responding to Shay’s statements, Lummis said: “There seems to be a lot of accusation against certain depositors and regulators who deal with digital assets. But you yourself did not admit any guilt,” he said. Shay refused to indict digital assets at the senate hearing, while Lummis replied that you used the term 10 times during your deposition.
In another part of the trial, Senator Elizabeth Warren criticized Silicon Valley Bank (SVB) CEO Gregory Pecker and Signature Bank’s Shay for allegedly hiding millions after recklessly bankrupting banks.
Senator Warren said in his speech: “The law now says that people like Mr. Becker and Mr. Shay can pay themselves tens of millions of dollars in bonuses and stock options and that when the banks fail, Mr. Becker and Mr. Shay can keep all the money, which is downright wrong.” Warren continued, “If we don’t fix this, every CEO of these multi-billion dollar banks will continue to take risks and fail banks. In such a case, everyone will have to pay the price for it.”
Warren said he was working within a bipartisan group on the Banking Committee to propose a bill that could recover those monies.
In April, New York Department of Financial Services (NYDFS) investigator Adrienne Harris reportedly said it was ridiculous to blame crypto for Signature Bank’s collapse. NYDFS took control of Signature Bank on March 12, claiming to protect the US economy from system risk. The bank became the last failed bank following the bankruptcy of crypto-friendly Silvergate Bank and SVB.
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