Massachusetts Senator Elizabeth Warren, one of the most prominent anti-crypto voices in the United States Congress, called on Jerome Powell to recuse himself during an internal investigation at the Federal Reserve.
Speaking to reporters in Washington DC on March 15, Warren he said Powell led a “deregulatory movement” at the Fed that potentially touched on some of the conditions that led to the collapse of Silicon Valley Bank. On March 13, the Fed chairman called for a “thorough, transparent and prompt review” of its activities following the bank’s closure by the California Department of Financial Protection and Innovation.
“For this review to have any credibility at all, Chairman Powell needs to recuse himself,” Warren said. “He’s the one who not only chaired the Fed, who not only came to Congress and answered questions from me and others about this deregulatory move, but actually led it.”
The senator added:
“It is important that while we investigate what went wrong, Chair Powell has stepped back and let Michael Barr […] conduct an independent investigation.”
Barr announced that he would review management on the Fed’s supervision and regulation of Silicon Valley Bank, due to be released on May 1. The US Department of Justice and the Securities and Exchange Commission also allegedly announced their own probes related to some bank executives selling stock in the weeks before the closing.
While the collapse of the three major banks had various causes not necessarily related to cryptocurrencies, digital assets in the media and among some government officials seem to bear part of the blame.
On March 8, parent company Silvergate Bank said it would voluntarily shut down the crypto bank, saying its plan included “full repayment of all deposits.” Silicon Valley Bank closed after firms fled with roughly $40 billion in assets, but the U.S. government stepped in and announced that most uninsured depositors would be made whole.
Related: US lawmaker accuses FDIC of using banking instability to attack cryptocurrencies
For many, Signature Bank stands out as an anomaly among these failures the following events are closed from the New York Department of Financial Services, claiming it “protects the U.S. economy by strengthening public confidence” in the banking system. Board member Barney Frank suggested that government officials were trying to send a “strong anti-crypto message” while the NYDFS reportedly said the bank failed to provide “reliable and consistent data” to the regulator.
