After Silvergate Bank announced its voluntary liquidation, U.S. senator Elizabeth Warren is attributing the financial institution’s downfall to “crypto risk.” According to Warren, she had previously warned about Silvergate. However, some critics are dismissing Warren’s opinion as “terribly misinformed” and claim that she is “tossing out egregious accusations.”
Crypto Proponents Offer Different Perspectives on Silvergate Bank’s Downfall After Elizabeth Warren Blasts So-Called ‘Crypto Risk’
Hours after Silvergate Bank announced its liquidation, U.S. senator Elizabeth Warren (D-MA) tweeted about the financial institution’s demise. Warren once again referred to cryptocurrencies as risky and expressed disappointment about Silvergate’s failure, which she deemed “predictable.”
On March 9, U.S. Senator Elizabeth Warren tweeted, “I warned of Silvergate’s risky, if not illegal, activity—and identified severe due diligence failures. Now, customers must be made whole & regulators should step up against crypto risk.” The Massachusetts senator’s statement was met with criticism almost immediately after its publication. “You caused a bank run with spurious accusations and are now claiming you predicted it—Olympic-level mental gymnastics,” one individual responded to Warren’s tweet.
The individual’s comment about Warren starting the Silvergate bank run stems from the letter that Senator Warren, along with Senators Roger Marshall (R-KS) and John Kennedy (R-LA), wrote. The bipartisan letter contained numerous accusations as it requested information on a “massive crypto scandal.” In response to Warren’s tweet on Thursday, one person asked the politician if she had ever managed to “not be terribly misinformed while tossing out egregious accusations?”
Some critics argue that Warren is employing the age-old propaganda that blames objects rather than individuals and businesses for failure. This approach is akin to inanimate weapons causing violence on their own, a pencil writing a hateful letter autonomously, or cryptocurrencies causing harm to investors rather than the crypto business operators. Many critics on Twitter disagreed with senator Warren’s views on the matter. In response to her allegations, crypto CFA Ram Ahluwalia offered a different perspective on the Silvergate situation.
“Silvergate, the first crypto bank, faced a bank run that led to its downfall,” Ahluwalia wrote. “Despite facing allegations around AML, it was not these issues that ultimately caused the demise of [Silvergate Bank]. The responsibility for bank supervision lies with the Executive Branch, but this process was cut short. A senator’s letter, amplified by social media, undermined public trust in Silvergate, ultimately leading to a crisis of confidence.”
Upon reviewing Warren’s Twitter thread, there appears to be little to no support for her commentary in the post, despite the fact that the tweet has received 942 likes and was seen more than 724,000 times. Most of the responses to Warren’s tweet express disgust for her statements on the matter. As usual, criticism of the politician’s actions likened them to politicians breaking legs to sell crutches.
“This is why I hate political self-elevation at the expense of others,” one person told Warren. “Crypto [and] blockchain solves many issues. Unfortunately, it doesn’t solve posturing, self-serving interests, and fear-mongering by elected officials. Thanks for making it harder for honest, hardworking people.”
What are your thoughts on Senator Warren’s views on cryptocurrencies and their role in the downfall of Silvergate Bank? Do you believe her accusations were justified, or do you think they were misguided and harmful to the institution? Share your opinions in the comments below.