A former Signature Bank executive has come under fire for seemingly trying to blame his bank’s crypto meltdown while allegedly being able to pocket millions in bonuses and stock options .
During a Senate Banking Committee hearing on May 16, U.S. Senator Cynthia Lummis lashed out at Scott Shay, the former chairman of the now-defunct bank, over his prepared statement about what happened. led to the collapse of his bank.
In his testimonyShay noted that the bank began accepting deposits from companies in the digital asset industry in 2018 and then “significantly” reduced its digital asset deposits in 2022 as the industry experienced volatility.
He said his bank was seized by regulators after “a bank with deep ties to the digital asset industry” fell, which then resulted in $16 billion being withdrawn from Signature.
“It seems like there’s been a lot of deflection of blame onto these particular depositors who deal with digital assets and onto regulators, but you haven’t accepted any blame yourself,” Lummis said.
Shay, however, denied pointing the finger at digital assets during the Senate hearing.
“You use the term 10 times in your testimony,” Lummis replied.
“Keeping Millions”
During another part of the hearing, Senator Elizabeth Warren struck down Silicon Valley Bank (SVB) CEO Gregory Pecker and Signature Bank’s Shay for allegedly “keeping millions after reckless bank failures.”
“Right now the law says that people like Mr. Becker and Mr. Shay … can pay themselves tens of millions of dollars in bonuses and stock options, and when the banks blow up, Mr. Becker and Mr. Shay keep all the money. And that’s just plain wrong.”
“If we don’t fix the problem, every CEO of these multi-billion dollar banks will continue to take risks and blow up banks, and everyone will have to pay for it.”
Warren noted that she’s been working in a bipartisan group on the Banking Committee to introduce a bill that can claw back “those crazy paychecks.”
Cointelegraph contacted Shay and Becker for comment but did not receive an immediate response.
Related: Signature Bank failed to understand the risks associated with crypto: FDIC Chairman
In April, Adrienne Harris, Superintendent of the New York Department of Financial Services (NYDFS), reportedly said it was “ridiculous” that anyone could blame crypto for the collapse of Signature Banks.
Speaking at a Chainalysis Links conference in New York, she said the events that led to Signature’s failure were more of a “new banking race.”
The NYDFS took control of Signature Bank on March 12, saying it was protecting the US economy from “systemic risk”. The bank was the latest failure after the collapse of Silvergate Bank and SVB.
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