The United States-based crypto advocacy group Blockchain Association has called on financial regulators to provide information related to the potential “de-banking of crypto firms” in the wake of the failures of the Signature, Silicon Valley Bank and Silvergate banks. The Association has submitted Freedom of Information Act requests to the Federal Deposit Insurance Corporation, the board of governors of the Federal Reserve System, and the Office of the Comptroller of the Currency for documents and communications that could potentially show regulators’ actions “improperly contributed” to the collapse of the three banks.
Crypto firms “should be treated like any other law-abiding business” in the United States with access to bank accounts, according to Blockchain Association CEO Kristin Smith. The association is investigating “troubling allegations — including account closures and refusal to open new accounts — which have grown more concerning in the wake of this week’s banking crisis,” said the association, adding, “A crisis that long term crypto opponents have rushed to blame, incorrectly, on the technology.”
The recent banking crisis began with Silvergate’s parent company announcing on March 8 that it would “wind down operations” for the crypto bank. Silicon Valley Bank followed on March 10 with its own failure after a run on deposits, and the Treasury, Fed and FDIC announced the closure of Signature Bank on March 12. At the time, a joint statement from the regulators said the action against Signature was taken to “protect the U.S. economy by strengthening public confidence in our banking system.”
However, former U.S. Representative and Signature board member Barney Frank reportedly claimed the FDIC was sending a “strong anti-crypto message” in shutting down the bank, and some lawmakers are demanding answers. In response to these events, the Blockchain Association is pushing for transparency from regulators on their actions regarding the collapse of these three banks.
Crypto-friendly banks, such as Signature Bank, have been essential to the success of many cryptocurrency firms in the United States, including Coinbase, Paxos Trust, BitGo and Celsius. Prior to its closure, Signature was considered to be one of the largest crypto-friendly banks in the country.
Some in the space have suggested that federal regulators’ perceived attack on banks servicing crypto firms could force companies to turn to “shadier” options. The sudden collapse of these crypto-friendly banks has left many in the crypto industry feeling vulnerable and uncertain about the future of banking for crypto firms in the United States.
The Blockchain Association's call for transparency from regulators on their actions regarding the collapse of these banks is a crucial step towards ensuring fair treatment of crypto firms in the United States. The Association believes that crypto firms deserve access to bank accounts and should be treated like any other law-abiding business in the country.
As the crypto industry continues to grow and mature, it is essential for financial regulators to recognize the importance of crypto-friendly banks and the role they play in the success of crypto firms. By promoting transparency and fair treatment of crypto firms, financial regulators can help foster a healthy and sustainable environment for the industry to thrive.
In conclusion, the recent banking crisis in the United States has raised concerns within the crypto industry regarding the treatment of crypto firms by financial regulators. The Blockchain Association's call for transparency from regulators on their actions regarding the collapse of these banks is a step in the right direction towards ensuring fair treatment of crypto firms. As the crypto industry continues to grow and mature, it is essential for financial regulators to recognize the importance of crypto-friendly banks and the role they play in the success of crypto firms.
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