Investigation of the collapse of the American Signature Bank found that the cause was a liquidity crisis and poor management.
However, the chairman of the Federal Deposit Insurance Company (FDIC) is sure: cryptocurrencies have done their part.
Martin Gruenberg, speaking at a congressional hearing on “Prudential Regulator Oversight,” recalled the recent collapse of Silicon Valley Bank and Signature Bank.
The official admitted that the banks were poorly managed and overly dependent on uninsured deposits.
“Also, the bank failed to understand the risk of linking to deposits from companies in the cryptocurrency industry and its dependence on them.
Banks have failed to recognize their vulnerability to the massive shocks to the crypto industry that occurred in late 2022 and 2023,” says the FDIC chairman.
Former Silicon Valley Bank s CEO Greg Becker said that one of the main reasons for the collapse of the banks was rising prime rates and the withdrawal of liquidity because of this.
The ex-banker said that “no bank could have survived a withdrawal of this magnitude.