On May 16, United States Senators Cynthia Lummis and Elizabeth Warren blasted former executives of Signature Bank and Silicon Valley Bank in a Senate Banking Committee hearing for allegedly blaming crypto for their bank’s demise while raking in millions in bonuses and stock options.
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Senators Criticize Bank Execs’ Statements
In particular, US Senator Cynthia Lummis criticized Scott Shay, the previous chairman of the bankrupt bank, for his prepared speech regarding the events that caused his bank’s demise.
Lummis remarked:
“It looks like there has been a lot of deflection of blame onto those particular depositors that deal in digital assets and onto regulators, but you haven’t accepted any blame yourself.”
Crypto Caused Collapse of Banking Firms?
According to Shay’s testimony, the bank started taking assets from companies involved in the digital asset sector in 2018, but when the market encountered turbulence in 2022, it “significantly” limited the amount of deposits it was taking.
He said that his bank was taken by regulators when “a bank with strong ties to the digital asset sector” collapsed, resulting in the withdrawal of $16 billion from Signature.
Later, in the same hearing, Senator Elizabeth Warren lambasted Silicon Valley Bank CEO Gregory Pecker and Signature Bank’s Shay for reportedly “keeping millions after recklessly crashing banks”.
Senators to Recover “Crazy Paychecks”
Warren stated that she is working with a bipartisan coalition in the Banking Committee to develop legislation that will allow her to recover “these crazy paychecks.”
“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 get to keep all the money. And that is just plain wrong,” she said.
Senator Warren promised in February of this year that she will reintroduce the Anti-Money Laundering Act to protect Digital Assets. In addition, Warren recommended enacting the Ransom Disclosure Act in 2021 to protect investors from intrusions.
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