Senator Michael Bennet said crypto was not “even as stable as the marijuana industry,” questioning Signature Bank's ability to service digital asset firms but not dispensaries.

Speaking at a March 16 hearing of the Senate Finance Committee, Bennet brought up the recent closure of the crypto-friendly Signature Bank with lawmakers and Treasury Secretary Janet Yellen in a discussion of U.S. President Joe Biden’s FY 2024 budget. The Colorado senator drew a comparison between the relationship of banks and crypto companies to that of institutions and marijuana dispensaries — a legal service in many U.S. states that is “frozen out of the financial system”.

“Signature Bank failed and almost a fifth of its deposits came from crypto,” said Bennet. “They’re not allowed to do anything with marijuana, but apparently they can lay 20% of this on crypto — a notoriously unstable [...] thing that nobody here even understands and where the value of the assets can soar and collapse.”

According to Bennet, crypto was not “even as stable as the marijuana industry”, implying it may have been a factor in the collapse of Signature Bank. However, Signature board member and former U.S. Representative Barney Frank said there was no issue regarding solvency at the time the New York Department of Financial Services took control of the bank on March 12.

The failure of Signature Bank, Silicon Valley Bank and Silvergate Bank and their ties to crypto firms have been part of discussions among industry experts, regulators, and lawmakers addressing the potential impact on the U.S. financial system. Many in the crypto and blockchain space have suggested that government officials were looking to ‘de-bank’ crypto companies, which could have far-reaching implications.


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Recommended content


Recommended Content

Editors’ Picks

Ethereum has lost its “ultra” sound money status, faces key rectangle resistance hurdle

Ethereum has lost its “ultra” sound money status, faces key rectangle resistance hurdle

Ethereum is up 0.5% on Thursday following a recent analysis showing that the top altcoin lost its "ultra" sound money narrative. Meanwhile, ETH ETFs recorded net inflows for the first time after nine days of consecutive outflows.

More Ethereum News
Solana bears dominate market as SunPump has potentially led to less demand for SOL

Solana bears dominate market as SunPump has potentially led to less demand for SOL

Solana is down 2.5% on Thursday following bearish signals across its funding rate and total fees captured. SOL's weak performance could also be linked to the declining traction seen in its meme coin generation platform Pump.fun.

More Solana News
AI tokens see narrow gains as Wall Street banks raise price targets on NVDA

AI tokens see narrow gains as Wall Street banks raise price targets on NVDA

AI tokens NEAR, ICP, RENDER and TAO briefly traded in the green on Thursday following Wall Street banks' positivity toward Nvidia's earnings report. While a correction followed, these tokens could rally if NVDA meets expectations.

More Cryptocurrencies News
XRP back above $0.57 even as Ripple traders take $8 million in profits

XRP back above $0.57 even as Ripple traders take $8 million in profits

Ripple (XRP) traders have consistently taken profits on their holdings in the last two weeks, per Santiment data. Once again, traders have grabbed $8.36 million in profit so far on Thursday. Typically, profit-taking negatively influences the asset as it increases the selling pressure. 

More Ripple News
Bitcoin: Will BTC continue its ongoing decline?

Bitcoin: Will BTC continue its ongoing decline?

Bitcoin (BTC) trades above $59,000 on Friday, but it has lost 7.5% this week so far after being rejected around the daily resistance of $65,000. The decline is supported by lower demand from the US spot Bitcoin ETFs, which registered a net outflow of $103.8 million, falling Bitcoin's Coinbase Premium Index, and a spike in Network Realized Profit/Loss. However, some investors seem to be taking the chance to buy BTC amid this price dip, as shown by the Exchange Netflow data.

Read full analysis
Moneta Markets review 2024: All you need to know

Moneta Markets review 2024: All you need to know

VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.

Read More

BTC

ETH

XRP