"Crypto-fear-inaccurate withdrawals" were the only issue Signature Bank had before regulators took control in March, according to Barney Frank.
In the wake of Signature Bank's collapse, Barney Frank, a former member of the United States House of Representatives and board member, has criticized specific members of the public.
In a May 30 hearing before the New York State Senate, Forthright said he had "no concessions of guilt" in regards to the disappointment of Mark, guaranteeing that the bank's dealings with crypto were "free from even a hint of harm" preceding controllers stepping in. The former U.S. legislator said that some people didn't know the difference between investing directly in digital assets and facilitating crypto transactions at the bank.
"It wasn't so much that individuals who were in the computerized business themselves overreacted; it was others who didn't grasp the business yet were scared by it," expressed Honest about the breakdown of Mark. "Unfortunately, many uninsured depositors were anti-crypto and incorrectly associated us with Silicon Valley.
The New York Branch of Monetary Administration (DFS) assumed command over Mark Bank in spring regardless of many, including Honest, contending the firm was not ruined at that point. The bank's breakdown followed the disappointment of Silicon Valley Bank and the closure of Silvergate Bank, both associated with crypto firms.
Frank continued:
“Our assets were fine, our capital was fine, and our loan portfolio was fine on the day we were shut down—I believe prematurely. We only had inaccurate withdrawals from crypto-fear.
Related: According to the head of the NYDFS, it is absurd to believe that the collapse of Signature Bank was connected to cryptocurrencies.
The New York Senate hearing was one of the first at the state level to investigate the failure of the crypto-friendly bank. In March, federal lawmakers met to discuss the circumstances that led to the failures of Signature Bank and Silicon Valley Bank. Prior to the United States primaries and elections in 2024, digital assets may become a policy issue.
Due to the availability of capital and the number of businesses setting up shop in the state, financial regulators in New York are frequently at the forefront of policies that define the crypto industry. Since 2015, when it implemented its BitLicense regime, DFS has been behind investigations and enforcement actions against several crypto firms.
(TURNER WRIGHT, Cointelegraph, 2023)