After the collapse of banks, crypto companies are looking for a new home

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After the collapse of banks, crypto companies are looking for a new home

Due to the fall of several banks that were open to crypto companies, those same companies now have to find a new financial home. The companies are now trying to find refuge with smaller start-up banks in the United States, but also abroad, writes The Wall Street Journal (WSJ).

Previously, the crypto pioneers could still turn to Silvergate Capital Corp and the Signature Bank. Both financial institutions were more than happy to welcome the companies. The start-ups could also take out loans from these banks for less strict conditions. That also entailed risks, which caused the collapse of both banks.

Trembling

Large banks, such as JPMorgan and the Bank of New York Mellon Corp., also do business with crypto companies. Although people there are hesitant and potential customers are subject to strict requirements. Also, not all services are available for crypto customers.

Smaller regional banks in the US are more open to taking on risky clients. Top executives in the crypto industry tell WSJ that they are receiving a “positive image” from smaller banks such as Customers Bancorp and Fifth Third Bancorp. Crypto companies are also welcomed with open arms at smaller start-up banks such as Cross River Bank. Although others in the industry are seeking refuge on the other side of the Atlantic.

Banks fill vacuum

The fall of Signature Bank and Silvergate created a vacuum for financial services for crypto companies. Other banks are now trying to fill that gap, although they are also wary of government interference. For example, the US financial watchdog announced last week that crypto providers may be working in violation of US law.

Bankers, meanwhile, are constantly approached by employees in the crypto industry. In conversation with WSJ, one banker says he has had to set his phone to ‘do not disturb’ in order to ‘get some sleep’.

“Clearly we want to diversify the options we have”

Nicola White, CEO of B2C2

However, crypto companies have also learned their lesson after the collapse of banks. For example, the companies now realize that they can better spread their assets over several banks. For example, trading platform B2C2 has now submitted applications for twenty different banks, while only twelve applications were submitted a month ago. “Clearly we want to diversify the options we have,” said the company’s CEO.

The smaller banks also realize that crypto companies also entail dangers. For example, the banks are afraid that government intervention will take place in the crypto industry, which in turn may have consequences for the banks that do a lot of business with the sector.

Due to the fall of several banks that were open to crypto companies, those same companies now have to find a new financial home. The companies are now trying to find refuge with smaller start-up banks in the United States, but also abroad, writes The Wall Street Journal (WSJ). (ANP / AFP)

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