Senators slam bank execs for blaming collapses on crypto, pocketing millions

A former Signature Bank executive has come under fire for trying to blame the collapse of your bank in crypto while he can supposedly pocket millions in bonuses and stock options.

During a Senate Banking Committee hearing on May 16, US Senator Cynthia Lummis lashed out at Scott Shay, the former president of the now-defunct bank, regarding his prepared statement about what led to his bank's collapse.

In its testimonyShay noted that the bank began accepting deposits from companies in the digital asset sector in 2018 and then "significantly" reduced its digital asset deposits in 2022 as the industry experienced volatility.

said his the bank was seized by regulators after “a bank with strong ties to the digital asset sector” fell, which later led to $16 billion being withdrawn from Signature.

“It seems like a lot of blame has been shifted to those individual depositors who trade digital assets and to regulators, but you haven't accepted 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 responded.

'Save millions'

During another part of the hearing, Senator Elizabeth Warren damned Silicon Valley Bank (SVB) CEO Gregory Pecker and Signature Bank's Shay for allegedly "taking millions for themselves after reckless bankruptcies."

“Right now, the law says that people like Mr. Becker and Mr. Shay [...] they can pay tens of millions of dollars in bonds and stock options, and when the banks explode, Mr. Becker and Mr. Shay get all the money. And that's just wrong."

"If we don't fix it, all the CEOs of these multi-billion dollar banks will continue to carry risks and blow up banks, and everyone else will have to pay for it."

Warren noted that he is working within a bipartisan group on the Banking Committee to introduce a bill that would bring back "these crazy paychecks."

Cointelegraph reached out to Shay and Becker for comment but did not immediately receive a response.

Related: Signature Bank Misunderstood Risks Associated With Crypto: FDIC Chairman

In April, Adrienne Harris, superintendent of the New York Department of Financial Services (NYDFS), said it was "ridiculous" that one could blame cryptocurrencies by the collapse of Signature Banks.

During a Chainalysis Links conference in New York City, he said the events that led to Signature's failure were instead a "run on the bank a la nueva."

the NYDFS took control of Signature Bank on March 12, claiming it was protecting the US economy from “system risk”. The bank was the latest flop after the collapse of crypto-friendly Silvergate Bank and SVB.

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