New York State Senate hearing sees former US lawmaker rubbish any role of crypto in the collapse of Signature Bank.
A hearing was held in New York on 30 May, where former US lawmaker Barney Frank was seen supporting crypto in the Signature Bank’s collapse. Frank, who was a director at Signature Bank and a former member of the US House of Representatives, pointed fingers at other reasons for the bank’s collapse.
The New York State Senate hearing was held to go through possible reasons for the bank’s failure and prevent such instances. The former US lawmaker claimed that Signature Bank had all compliances in place for its crypto dealings, even though it acted only as a crypto facilitator rather than investing directly in such assets.
Frank was of the view that panic selling amongst unaware investors led to the bank’s downfall. Even though crypto insiders hadn’t rung any alarm bells, the string of failures in other crypto-related banks like Silicon Valley and Silvergate. The former US lawmaker said that many made the mistake of associating Signature Bank with Silicon Valley Bank, which wasn’t appropriate.
He said, “On the day we were shut down — I believe prematurely — our assets were fine, our capital was fine, our loan portfolio was fine. The only problem we had was crypto-fear-inaccurate withdrawals.”
Eventually, Signature Bank was taken over by the New York Department of Financial Services (DFS), even though the bank wasn’t insolvent at the time.
The former US lawmaker’s claim confirms the fact that crypto did not have a role to play in the collapse of the US banks in 2023. Panic selling and misinformation were likely some of the reasons why regulators had to take over Signature Bank.