Barney Frank, a former member of the United States House of Representatives and a Signature Bank board member, has pointed the finger at certain members of the public following the bank's collapse.
In a May 30 hearing before the New York State Senate, Frank saying He had no "mea culpas" regarding Signature's failure, claiming the bank's cryptocurrency dealings were "safe and sound" before regulators stepped in. The former US lawmaker suggested that the bank acted as a facilitator of cryptocurrencies rather than directly investing in digital assets and that some in the public did not make this distinction.
โIt wasn't that people who were in the digital business panicked, it was other people who didn't understand the business but were scared,โ Frank said of Signature's collapse. "Unfortunately, many uninsured depositors were hostile to cryptocurrency and misguided guilt by association between us and Silicon Valley."
The New York Department of Financial Services took control of Signature Bank in March despite many, including Frank arguing that the company was not insolvent At the time. The bank's collapse followed the failure of Silicon Valley Bank and the closure of Silvergate Bank, both of which were connected to crypto firms.
frank added:
โThe day we closed, I think prematurely, our assets were fine, our capital was fine, our loan portfolio was fine. The only problem we had was inaccurate withdrawals for fear of crypto.โ
At 12:00, the #NYSenate will hold a public hearing to answer questions about bank failures in New York State. Why did Signature Bank fail? What can be done to prevent future bank failures? See live.https://t.co/0sqElpSIYE pic.twitter.com/jSqtBF4HFP
โ New York State Senate (@NYSenate) May 30, 2023
The New York Senate hearing was one of the first at the state level to explore the failure of the crypto bank. legislators at the federal level summoned in March to discuss the events that led to the collapse of Silicon Valley Bank and Signature Bank. Digital assets could emerge as a political position ahead of the 2024 US primaries and elections.
Financial regulators in New York they are often at the forefront of policies that define the crypto industry due to the capital available and the companies that settle in the state. Former FTX CEO Sam Bankman-Fried will face his criminal trial in New York beginning in October, and the state's Department of Financial Services has been behind investigations and enforcement actions of various cryptocurrency firms since it implemented its BitLicense scheme in 2015.
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