Bank sector suspicious of crypto after Silvergate, signature closures
Bank sector suspicious of crypto after Silvergate, signature closures
The banking sector of the United States hesitates to do business with crypto companies after the most crypto-supporting financial institutions in the country were closed at the beginning of this month.
A collection of industry participants, bank managers and investors reports on various cases of banks that make crypto partnerships difficult, from protracted application processes for such companies to the full exit from the industry.
The banking problem of crypto
As reported Bloomberg search crypto company desperate after the Silvergate Bank, the Silicon Valley Bank (SVB) middle March fallen within a week.
For example, Cross River Bank received over 100 new customer inquiries within a few days after the SVB was closed. Although not all of these customers were crypto companies, Cryptopotato was previously reported that cryptofocussed Swiss banks recently recorded a similar increase in new traffic, especially from previous Silbertor Customer.
Unfortunately for the industry, Cross River declined almost all of these inquiries. Spokeswoman Eden Hoffman told Bloomberg that the company "only takes into account companies with existing relationships with Cross River, which are blue chip customers and an integral part of the FinTech ecosystem".
Some large global banks-including JP Morgan Chase and Bank of New York Mellon-have selected engagements in the industry. However, BISTAMP CEO Bobby Zagotta claims that you have long onboarding processes that can take up to 6 months. The crypto exchange itself once used Silvergate and signature, but is now MVB Financial Corp. and Customers Bancorp while exploring other regional partners.
Operation Chokepoint 2.0
While the tax authorities did not prohibit the crypto asset sector, the Federal Reserve, FDIC and OCC did this Edited instructions Risks to be observed when dealing with crypto companies. One of them was the "unpredictability" of deposit and drainage, which can lead to instability for a bank in times of an industry -wide market panic that is too much exposed to the sector.
Some suspect that the quick passing against the bank partners of crypto in connection with increasing regulatory enforcement measures against large industrial companies is part of a more comprehensive government absence in order to sell crypto from the USA. For example Tom Emmer, a crypto-supporting congress member examined The forced closure of the signature bank by the government as an intentional anti-crypto attack.
"No bank wants to raise the hand and say: 'We are the type that serves the crypto industry because they have seen what happened," he told Bloomberg. "No bank would like to apply next Silvergate or Signature."
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