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The former Signature Bank executive has been criticized for trying to blame the collapse of his bank on cryptocurrencies, while allegedly being able to receive millions in bonuses and stock options.
During a Senate Banking Committee hearing on May 16, US Senator Cynthia Lummis lashed out at Scott Shay, former chairman of a now defunct bank, for his prepared statement about what led to his bank’s collapse.
In testimony, Shay noted that the bank began accepting deposits from businesses in the digital asset sector in 2018 and then “significantly” cut its digital asset deposits in 2022 as the industry experienced volatility.
He said his bank was seized by regulators after “a bank with close ties to the digital asset sector” collapsed, leading to a $16 billion withdrawal from Signature.
“It seems like the blame has often been shifted to those specific digital asset savers and regulators, but you haven’t taken any blame yourself,” Lummis said.
Shay, however, denied pointing fingers at digital assets during the Senate hearing.
“You use the term 10 times during your testimony,” Lummis replied.
During another part of the hearing, Senator Elizabeth Warren criticized Silicon Valley Bank (SVB) CEO Gregory Pecker and Signature Bank’s Shay for allegedly “withholding 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 burst, Mr. Becker and Mr. Shay get to keep all the money. And that’s just not right.”
“If we don’t fix this, every CEO of these multi-billion dollar banks will continue to be loaded with risk and blow up banks, and everyone else will have to pay the price.”
Warren noted that she is working with a bipartisan group on the Banking Committee to introduce a bill that could bring back “these crazy wages.”
Cointelegraph contacted Shay and Becker for comment, but received no immediate response.
Related: Signature Bank Failed to Understand Cryptocurrency Risks: FDIC Chairman
In April, Adrienne Harris, superintendent of the New York City Department of Financial Services (NYDFS), reportedly said that it was “ridiculous” to blame cryptocurrencies for the collapse of Signature Banks.
During the Chainalysis Links conference in New York, she said that the events leading up to Signature’s collapse were instead a “newfangled bank run.”
On March 12, NYDFS took control of Signature Bank, saying it protects the US economy from “systemic risk.” The bank became the latest bankrupt after the collapse of the cryptocurrency bank Silvergate Bank and SVB.
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