The regulation and supervision of the collapsed Silicon Valley Bank will be investigated by Vice Chair for Supervision Michael S. Barr, as confirmed by the Federal Reserve Board. In a press release on Monday, the Fed announced that it would unveil the review results by May.

Michael Barr, who was previously an adviser at Ripple in 2015, is no longer listed in that role, and the exact date he left is still being determined. Before this, he played a significant role in creating the Dodd-Frank Act while serving in the Treasury Department during the Obama administration.

The act prevented banks from engaging in trading activities using customer deposits. In July of the previous year, President Joe Biden nominated Barr for Vice Chair of Supervision, critical in regulating finance in the United States.

In response to President Biden’s request for a “complete accounting” of the reasons that resulted in the regional bank’s closure, the Federal Reserve has taken action. The bank, which held assets totaling two-hundred and nine billion dollars, faced withdrawal requests of forty-two billion dollars in less than two days, leading to its takeover by the FDIC over the weekend.

As per the Fed’s statement, Michael Barr emphasized the need for a meticulous and comprehensive evaluation of their supervision and regulation of the company, plus the lessons worth noting from the incident. He added that it is essential to exercise humility throughout the process.

In addition to its primary role as a tech startup lender in the region, SVB also provided services to major entities with considerable involvement in the cryptocurrency industry, such as Ripple, Andreessen Horowitz, and Circle. However, as previously reported, the uncertainty regarding the integrity of Circle’s USD Coin reserve contributed to the asset losing its value to the US dollar over the weekend.

As reported recently, the FDIC has decided to support all customer deposits in the bank to prevent a potential panic and bank run that could affect other health institutions. According to experts, the bank’s collapse can be attributed to the investment of deposits in long-term securities and the failure to hedge against Fed rate hikes.

“CEO of Custodia Bank Responds to Recent Developments

Caitlin Long, the CEO of Custodia Bank, has responded to Michael Barr’s appointment as the leader of the review of SVB supervision. The CEO of Custodia Bank, Caitlin Long, used a series of tweets to criticize Michael Barr for his involvement in rejecting the bank’s application to join the Federal Reserve System.

Long pointed out that the Fed had deemed Custodia Bank’s hundred percent cash model “unsound and unsafe.” Interestingly, Barr had made a statement just a day before regulators were compelled to shut down SVB, asserting that banks under the Fed’s oversight “are well protected from bank runs” in a speech on Thursday.

As a result, Caitlin Long has interpreted Michael Barr’s recent statement in the press release as an acknowledgment of wrongdoing. Long claims that she and other experts had already anticipated the recent bank runs and once again requested an opportunity to assist regulators in comprehending how it happened.

Some cryptocurrency community members have noted the irony in the Federal Reserve investigating itself. Adding to this narrative, it is worth noting that Greg Becker, the CEO of SVB, was a San Francisco Federal Reserve Board director until regulators took over his bank on Friday.