- Signature Bank executives were left scratching their heads when they were suddenly closed.
- They insist the bank could have survived the $16 billion in bank inflows.
- Regulators are being questioned over their sudden decision to close the banks.
In March, the sudden collapse of three banks in the United States had many fearing a looming banking crisis encryption Make unintentionally scapegoats.
In the wake of these meltdowns, a Senate Banking Committee heard from former bank executives on Tuesday, May 17, including two of Signature who maintain that the bank did not need to close.
“They withstood the economic earthquake”
Signature was willing to stay in business despite the $16 billion in customer withdrawals that followed the Silicon Valley bank failure, said Scott Shay, co-founder and former president of Signature. The collapse of other banks around Signature led to bank runs, which executives felt the bank could handle.
Signature’s former president, Eric Howell, added That the lender is “well capitalized, well in debt, and has sufficient borrowing capacity to withstand these withdrawals and future withdrawals”.
Regulators quickly intervened over the course of five days to close all three banks and prevent further losses from the banks’ management. However, the sudden intervention decision has called into question organizational neutrality and discrimination.
Moreover, many feel that the decision to close the banks was a hidden agenda to launch an attack on cryptocurrencies, as the three banks are known for serving crypto firms. Former Congressman Barney Frank He said The signature was closed to intentionally harm the cryptocurrency industry.
how the Cryptocurrency friendly banks They were shut down, and the fallout from dealing with defunct lenders has put the anti-cryptocurrency agenda in the spotlight. Only Frank, as well as American actor Tom Emmer, shed light on this.
In the aftermath of the closing of the banks, Emmer He said “The FDIC is weaponizing recent instability in the banking sector to purge legal crypto activity from the United States” after the agency banned signature buyers from offering crypto services.
However, the New York Department of Financial Services (DFS) to reject Such claims, saying that Signature’s shutdown was not related to cryptocurrency.
on the flip side
- At the same session, executives from Silicon Valley Bank and Signature Bank to reject Commitment to voluntary surrender of the millions of dollars that were paid to them before their banks collapsed.
Why should you bother
It will never be known if Signature can beat the bank and stay afloat. However, the sudden decision by regulators to close the banks will remain in question.
Read more about the impact on cryptocurrencies when banks closed:
Cryptocurrency Banking Canceled: Impact of Signature, Silvergate, and Silicon Valley Bank Collapses.
Read more about the Ministry of Justice’s crackdown on stock exchanges:
The US Department of Justice targets cryptocurrency exchanges, mixers, and crackdowns.