FDIC Chair Martin Gruenberg has publicly stated that Signature Bank’s involvement in the digital asset industry led to its collapse. Speaking at the House Committee on Financial Services, Gruenberg blamed Signature’s reliance on crypto-industry deposits, making the bank vulnerable to contagion from digital asset industry turmoil in late 2022 and into 2023. The FDIC chairman also acknowledged the agency’s shortcomings in not acting sooner to prevent the crisis from spreading throughout Signature’s operations and admitted that the agency’s supervision could have been stronger. Signature Bank was not exclusively a crypto bank but its effort towards the industry became more pronounced during the pandemic bull run. However, in a bid to reduce its exposure to the industry in a turbulent time, the bank distanced itself from the industry when FTX fell. The former exec revealed that the bank made significant reductions in digital asset deposits as a result of heightened market volatility and regulatory apprehensions. The crypto industry reacted strongly to Signature’s seizure, deeming the move as unnecessary, and blamed the regulators for specifically targeting them.