The US senator from Colorado believes that banks working with cryptocurrencies are acting recklessly and called the digital asset industry extremely unstable.

Speaking at a US Senate Finance Committee meeting discussing the 2024 budget, Senator Michael Bennet referred to the recent failure of Signature Bank. The politician suggested that the bank failed due to the fact that almost a fifth of its deposits were in cryptocurrency companies. The senator tried to convey the idea that it was the bank’s friendly attitude towards crypto assets that could be the main reason for the collapse.

Bennett compared cryptocurrency companies to pharmacies selling medical marijuana. Marijuana is legal in 37 US states, but possession, distribution, or sale is illegal at the federal level. According to him, even the sale of marijuana is more stable than the cryptocurrency industry.

“Banks are prohibited from doing anything with marijuana, so they decided to serve crypto companies, from which about 20% of deposits came. Digital assets are a notoriously volatile thing that no one here understands. These are assets with a high level of risk, because their value can both soar and collapse, ”Bennett is sure.

- Article Inline Advertisement 1-

Signature Bank board member Barney Frank recently said that regulators are using the problems of this and other banks to attack the cryptocurrency industry.