The Federal Deposit Insurance Corporation (FDIC), an agency in charge of protecting consumers, draws questions amid its takeovers of Signature Bank and Silicon Valley Bank, two entities that serviced cryptocurrency clients. During a financial services hearing on Wednesday, FDIC Chairman Martin Gruenberg responded to the inquiry of pro-Bitcoin lawmaker Tom Emmer, addressing the agency's plan to deal with the crypto-related intellectual property of Signet, the crypto-powered private money network owned by Signature. Gruenberg mentioned that the signature sell out of the bridge institution has already taken place. Emmer however rejected this statement in later tweet.

Though FDIC and US regulators had moved to shut down the two-banks in an attempt to safeguard US banking system, former house Financial Services Committee chair and Signature director Barney Frank hinted at the bank's solvency even when FDIC took control. In this commotion, the FDIC had sold off Silicon Valley Bank's deposits to First Citizens Bank, but Gruenberg's statement on the sale of any crypto-related assets or liabilities were in question according to Nic Carter, a venture capital firm's co-founder.

The hearing was mostly criticized as it failed to focus enough on FDIC's action towards Signature, and instead changed to discuss Silicon Valley Bank. For instance, Sarah Brennan, general counsel of research unit Delphi Digital, used her tweet to call out the inefficiency of the hearing - as a fact-finding hearing, it instead was used as a platform for grandstanding.

As the scrutiny around FDIC's approach for Signature Bank and Silicon Valley Bank intensifies, about $4 billion deposits related to Signature Bank crypto business are scheduled for return next week. These events remind people of the need for the government to handle private sector digital money rail responsibly, and the importance of a fact-finding hearing to arrive at a suitable solution.



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