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Comment by indy | Hacker News Reader

https://www.theblock.co/post/219391/barney-frank-regulators-...

According to The Block: Regulators shuttered Signature Bank to show 'crypto is toxic'.

“They closed us even though there was no good, compelling reason to do that because they wanted to show that banks shouldn't be involved in crypto,” Frank, a Democrat, said in a telephone interview. “We were the kind of poster child for having been involved in crypto."

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They’re quoting Barney Frank, an ex Signature Board member. Of course a failed bank’s Board will blame everyone but themselves.

Worth noting that's Barney Frank of the "Dodd–Frank Wall Street Reform and Consumer Protection Act" of 2010.

Also worth noting that it appears Barney Frank helped the effort to nerf Dodd-Frank in 2018 [0] (although I haven't dug deeply into that and from the fact that 3 of the articles supporting this were added today, the wikipedia editor might be injecting a biased view).

[0] https://en.wikipedia.org/wiki/Economic_Growth,_Regulatory_Re...

That was Rep. Barney Frank.

This is private citizen and board member Barney Frank.

But the objective fact of the matter is that crypto IS toxic.

While of course true for many reasons (including facilitating the existence of ransomware while providing literally no other offsetting value) that's not why the bank was shuttered. It was shuttered for the same reason SVB and Silvergate were closed. They had long-duration assets but needed capital now to facilitate withdrawals, which they had a lot of because of the crypto downturn. It was their lack of diversification and failure to adequately manage maturity risk. Which Barney is in part to blame. So of course the fingers are pointed in all directions, especially the gubmint.

> that's not why the bank was shuttered. It was shuttered for the same reason SVB and Silvergate were closed

Silvergate was significantly impaired by the crypto blow-ups [1]. That forced them to sell their short-duration, liquid holdings. It also started their stock-price slide [2]. The combination put them in a uniquely vulnerable and continuously degrading position. Signature wasn't as badly hit by the blow-up, but its stock started sliding with Silvergate. Perceptions matter, and when Silvergate folded, non-crypto depositors began pulling money from Signature.

Had Signature not banked crypto, or been publicly affiliated with it, they would have likely survived.

[1] https://www.bloomberg.com/news/newsletters/2023-03-09/silver...

[2] https://www.barrons.com/articles/crypto-silvergate-signature...

"Objective fact" lol please. Not an objective word in this sentence that you can back up with literally anything. Or we can just take your hyperbole and apply it to literally anything that has any negative sides to it.

Is that why more banks than crypto exchanges have collapsed in the past week?

Got any proof to back up that "fact" or is it really just an opinion?

Your sputtering rage and denial of the obvious is pretty illustrative of my point about crypto's toxicity and cultish obsessiveness.

Do you have any NFTs or ICOs or shitcoin rug pull scams you want to shill, or are you finally too embarrassed to do that in public under your own account because of the toxicity of crypto?

Why don't you prove it's not toxic by telling us how much and why you love and recommend crypto yourself, and explaining what it's actually good for?

You mean besides every day of the last fourteen-and-a-half years?

So the answer is no, got it.

Except there’s truth to it because no one can prove Signature had the same HTM issues as SVB did. Or that whatever outflows they suffered Friday rendered it insolvent.

The former holders of ~4bn of equity will sue, and the many people that are aware of the inolvency will be demonstrate it in court.

They have audited financial statements and more or less real time valuation of their assets, of course they can prove their solvency.

Great, and I’ve seen no evidence that they suffered the same risks as SVB based on publicly known financials.

We'll make sure to have the FDIC CC you on the emails next time, must have been an oversight.

the claim is that the closure was political which I agree with

but keep thinking that could never happen

Love that weird inclusion of "a democrat" in there. It's irrelevant and I have no idea why they thought that was an important factoid, but the oddity of it made me laugh.

Most articles will usually include something along those lines for former politicians, though with a bit more detail. He did co-author the Dodd-Frank reforms, after all, so there's actually relevant context buried in theree.

I'm not believer in character assassination, but facts don't lie. Barney Frank's credibility is worthy of examination.

https://www.businessinsider.com/the-one-thing-no-one-is-ment...

He sat on the board of the bank; his opinion on this matter is worth less than nothing. I hear Sam Bankman-Fried also thinks FTX did nothing wrong and was also shut down by the government meanies.

Operation chokepoint in action.

Operation chokepoint is a government project to target lawful but disfavored businesses such as pornography by using soft power such as unaccountable regulatory oversight to pressure commercial players such as banks and payment processors to execute their free association right to refuse to do business with these players.

Once locked out of banking they either can't do business or they move to using cryptocurrency and the government then exploits the unconventional payment method to lob money laundering charges at the operation.

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