US Senator blames the crypto collapse on bank executives

TL;DR Breakdown

  • US Senator Cynthia Lummis criticizes the statement of a former Signature Bank executive.
  • US Congress wants to abolish excessive executive compensation.

US Senator Cynthia Lummis has faulted the statement of a former Signature Bank executive at Congress. Scott Shay has come under scrutiny for allegedly attempting to shift blame onto the cryptocurrency industry while personally benefiting from hefty bonuses and stock options. During a Senate Banking Committee hearing on May 16, Senator Cynthia Lummis criticized Shay’s prepared statement regarding the bank’s collapse.

Senator Lummis pick holes in his statement

Scott Shay acknowledged that Signature Bank began accepting deposits from digital asset businesses in 2018 but significantly reduced its exposure to the industry in 2022 due to volatility. He claimed that the bank’s seizure by regulators was triggered by the failure of a bank closely associated with the digital asset sector, leading to the withdrawal of $16 billion from Signature Bank.

Senator Lummis accused Shay of deflecting blame onto cryptocurrency depositors and regulators while evading personal responsibility. Shay denied placing blame on digital assets, but Lummis pointed out that he mentioned them ten times in his testimony.

In another part of the hearing, Senator Elizabeth Warren criticized Gregory Pecker, CEO of Silicon Valley Bank, and Scott Shay for allegedly retaining millions of dollars in bonuses and stock options despite their banks’ reckless failures. Warren argued that the existing laws allowed CEOs to enrich themselves while leaving others to bear the consequences.

In order to address the issue, Warren announced her collaboration with a bipartisan group in the Banking Committee to introduce a bill aimed at reclaiming excessive executive compensation. She emphasized the need to hold CEOs accountable for their risky actions, warning that failure to do so would perpetuate a cycle of bank collapses with taxpayers bearing the burden.

US lawmakers want to curb excessive executive compensation

In April, Adrienne Harris, superintendent of the New York Department of Financial Services (NYDFS), dismissed the notion that crypto was to blame for Signature Bank’s collapse. Speaking at the Chainalysis Links conference in New York City, Harris characterized the events leading to the bank’s failure as a “new-fashioned bank run.”

On March 12, the NYDFS assumed control of Signature Bank, citing the need to protect the U.S. economy from systemic risk. Signature Bank’s collapse followed the failures of Silvergate Bank and SVB, both known for their involvement in the cryptocurrency industry.

Efforts are underway within the Senate Banking Committee to address the issues raised during the hearing. The proposed legislation aims to curb excessive executive compensation and prevent CEOs from profiting while their banks face financial ruin.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

文章来源于互联网:US Senator blames the crypto collapse on bank executives

Disclaimers:

1. You are solely responsible for your investment decisions and this info is not liable for any losses you may incur.

2. The copyright of this article belongs to the writer, it represents the writer's opinions only, not represents the site's ones. Not financial advice.

Previous 2023年5月18日 14:29
Next 2023年5月18日 15:30

Related articles

  • Latin American currencies over the week: Brazil’s inflation increases less than expected

    TL;DR Breakdown In Brazil, the real saw a 0.1% increase against the dollar as inflation came in lower than expected as Latin American currencies fell. Despite Brazil’s significant economic growth in the first half of the year, tax revenue has sharply declined. The UAE and Brazil have formed a partnership to exchange knowledge and expertise in economics through the UAE’s government experience exchange program. Description In Brazil, the real saw a 0.1% increase against the dollar as inflation came in lower than expected in August. Meanwhile, Latin American currencies experienced a decline to a three-week low this week in a volatile trading session, primarily influenced by losses in the Mexican peso. Simultaneously, the dollar maintained its six-month peak, influenced by … Read more In Brazil, the real saw a 0.1% increase against the dollar as inflation came in lower than expected in August. Meanwhile, Latin American currencies experienced a decline to a three-week low this week in a volatile trading session, primarily influenced by losses in the Mexican peso. Simultaneously, the dollar maintained its six-month peak, influenced by concerns about…

    Article 2023年9月9日
  • Will the digital economy thrive without blockchain?

    TL;DR Breakdown Franklin Templeton, a prominent asset management firm, views investment in cryptocurrency as a contribution to data technology. Considering the integral role of blockchain in facilitating the growth of the digital economy, a future without blockchain might be more of a paradox than a feasible prospect. Description The age-old debate about whether the thriving digital economy can sustain without the integral thread of blockchain technology brings us to a crossroad of potential change. Consider investing in the field of cryptocurrency as contributing to the broader realm of data technology. This perspective is reinforced by Franklin Templeton, the venerable asset management firm. Plunging … Read more The age-old debate about whether the thriving digital economy can sustain without the integral thread of blockchain technology brings us to a crossroad of potential change. Consider investing in the field of cryptocurrency as contributing to the broader realm of data technology. This perspective is reinforced by Franklin Templeton, the venerable asset management firm. Plunging into crypto: A leap of faith or strategic move? For a vast number of individuals and organizations, the territory…

    Article 2023年6月22日
  • Binance seeks new European banking partner as Paysafe withdraws support

    TL;DR Breakdown Paysafe Payment Solutions, Binance’s European banking partner, will cease its embedded wallet solution support for the crypto exchange in the European Economic Area (EEA) from September 25, 2023. Binance is searching for a new European banking partner after Paysafe’s decision to withdraw support for EUR deposits and withdrawals via Bank Transfer (SEPA). The termination comes amidst regulatory scrutiny faced by Binance, including a lawsuit by the U.S. Securities and Exchange Commission (SEC) and investigations for alleged offenses, including “aggravated money laundering” by French authorities. Description Binance, the world’s largest cryptocurrency exchange, is in search of a new European banking partner as Paysafe Payment Solutions, its current banking partner, announced the withdrawal of support for the crypto exchange across the European Economic Area (EEA). Paysafe stated that following a strategic review, it has decided to cease offering its embedded wallet solution … Read more Binance, the world’s largest cryptocurrency exchange, is in search of a new European banking partner as Paysafe Payment Solutions, its current banking partner, announced the withdrawal of support for the crypto exchange across the European…

    Article 2023年7月30日
  • DOJ urges court to stop SBF’s expert witnesses from testifying

    TL;DR Breakdown The DOJ has urged the court to bar SBF’s expert witnesses from testifying in the ongoing legal battle. Defense and prosecutors lock horns over testimony admissibility. Description As the trial of FTX founder Sam Bankman-Fried approaches, a legal tug-of-war over proposed witnesses has emerged between the defense and the Department of Justice (DOJ). Both parties have submitted their views on why certain witnesses should be disqualified from testifying, shedding light on the strategies they intend to employ in the upcoming trial involving … Read more As the trial of FTX founder Sam Bankman-Fried approaches, a legal tug-of-war over proposed witnesses has emerged between the defense and the Department of Justice (DOJ). Both parties have submitted their views on why certain witnesses should be disqualified from testifying, shedding light on the strategies they intend to employ in the upcoming trial involving fraud and conspiracy charges. DOJ wants SBF’s witnesses barred from testifying Bankman-Fried’s defense team has raised concerns about the financial analysis expert put forth by the DOJ. They argue that the proposed testimony might not be permissible under…

    Article 2023年8月29日
  • Crypto’s fate tied to upcoming U.S. presidential election?

    TL;DR Breakdown The uncertain narrative surrounding digital assets- whether they’re risk assets or a hedge against risk – has led to unpredictable price movements. Ed Moya, a Senior Market Analyst with OANDA, suggests the future of the industry in the U.S. might be tied to the outcome of the upcoming presidential election. Florida Governor Ron Desantis, a presidential candidate, is a vocal supporter of Bitcoin and has been pushing for crypto-friendly policies. A wavering climate has shadowed the cryptocurrency market in recent weeks, challenging investors to deduce whether digital assets offer a safe haven from financial risk or are themselves part of the risky asset class. Yesterday’s oscillation was no exception with Bitcoin (BTC) declining by 1.3% to $27,746 and Ethereum (ETH) down by 1.1% to $1,893 at the start of the East Asian trading day. Cryptocurrency has been caught in this seesaw of interpretation, bereft of a consistent narrative, and this lack of clarity has been contributing to erratic price movements. Despite these uncertainties, Ed Moya, a Senior Market Analyst with OANDA, identifies a potentially defining theme for the…

    Article 2023年6月2日
TOP