🚨US banks are becoming increasingly hesitant to work with crypto customers, especially after the recent collapses of regional lenders and heightened regulatory scrutiny. The closure of crypto-friendly Silvergate Capital Corp. and seizure of Signature Bank has left crypto firms struggling to find new banks for depository and payment services. Financial firms are imposing lengthy application procedures, turning away smaller companies and some retail platforms, and in some cases shutting the door on crypto businesses altogether. This has left crypto companies with limited options for banking services. 💰💸🏦
Cross River Bank, for example, has turned down almost all new client requests seeking a safe harbor for their deposits within days of SVB Financial Group’s Silicon Valley Bank and Signature collapsing. The bank is “only considering companies with existing relationships with Cross River that are blue-chip customers and integral to the fintech ecosystem,” according to a spokesperson for the lender.
While some big banks, such as JPMorgan Chase & Co. and Bank of New York Mellon Corp., seem willing to selectively do business with crypto firms, the on-boarding process with large global banks can take up to six months.
The strained relationships between banks and crypto firms have started to escalate this year, with banks often giving vague explanations that they “don’t do” crypto companies.
It’s a challenging time for the crypto industry to find suitable banking partners, and this trend is likely to continue. 💼💵📉
