Crypto firms have been left scrambling to find banking partners after the collapse of three crypto-friendly lenders in the U.S. last month, creating a risk their business will become concentrated in smaller financial institutions. It is a scenario that concerns U.S. regulators, who have expressed doubt about the safety and soundness of bank business models that are highly focused on crypto clients after Silvergate Capital Corp (SI.N), Signature Bank and Silicon Valley Bank imploded. Crypto firms have been left scrambling to find banking partners after the collapse of three crypto-friendly lenders in the U.S. last month, creating a risk their business will become concentrated in smaller financial institutions. It is a scenario that concerns U.S. regulators, who have expressed doubt about the safety and soundness of bank business models that are highly focused on crypto clients after Silvergate Capital Corp (SI.N), Signature Bank and Silicon Valley Bank imploded. This has left digital asset companies with little choice but to seek out smaller financial institutions, some in remoter corners of global finance. A spokesperson for FV Bank, a U.S.-licensed fintech-focused bank in Puerto Rico, said that it has seen an uptick in inquiries from potential customers in recent weeks, even though it is not insured by the Federal Deposit Insurance Corp. The bank does not lend and is therefore not subject to the same type of risks as traditional banks that operate on a fractional reserve system, a spokesperson said.
Full analysis : Crypto firms scramble for banking partners as willing lenders dwindle.
