Barney Frank claims Signature Bank's crypto dealings were "safe and sound" before regulators invaded the bank's operations.
In the aftermath of the collapse of Signature Bank, former US House Representative and the bank's board member Barney Frank criticized the public for misinterpreting the bank's involvement with cryptocurrencies.
During a May 30th hearing with the New York State Senate, Frank claimed he made no faults that could have led to the fall of Signature Bank, arguing that the bank's cryptocurrency dealings were "safe and sound" before regulatory intervention.
Did you know?
Want to get smarter & wealthier with crypto?
Subscribe - We publish new crypto explainer videos every week!
What is a Bitcoin & How Does it work? (Animated Explainer)
The ex-lawmaker suggested that Signature served as a facilitator for digital assets rather than a direct investor, a differentiation that some members of the public failed to acknowledge.
Unfortunately, a lot of uninsured depositors were hostile to crypto and made the mistaken guilt by association of us and Silicon Valley. It wasn’t that people who were in the digital business themselves panicked; it was other people who didn’t understand the business but were frightened by it.
The collapse of Signature Bank came in the wake of the failures of Silicon Valley Bank and Silvergate Bank, both known for their links with crypto firms.
The New York Department of Financial Services (DFS) took over Signature in March, despite Frank and others arguing the bank was solvent at the time.
Speaking further about the bank's condition at the time of its shutdown, Frank added:
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.
The hearing with the New York Senate was among the first aimed at investigating the downfall of the crypto-friendly bank. Discussions at the federal level also took place in March concerning the circumstances leading to the collapse of Silicon Valley Bank and Signature Bank.
Despite some claiming that crypto had nothing to do with the bank's collapse, the United States Federal Deposit Insurance Corporation (FDIC) Chair, Martin Gruenberg, believes that the bank failed to evaluate the risks linked to cryptocurrencies.
