Quelle surprise. There’s no shortage of banks currently “rolling out the welcome mat” for crypto firms who need accessing to banking after the blowup of popular crypto banks Silvergate and Signature Bank, according to a new report from WSJ.
New Jersey-based Cross River Bank was named among other regional banks like Customers Bancorp and Fifth Third Bancorp who are all “scrambling” to establish new relationships with crypto customers.
Additionally, large banks like JPMorgan Chase & Co. and Bank of New York Mellon Corp. are still doing business with crypto clients, the report notes. They’re simply being “selective” about their customer list and what services they provide.
The fears that Washington was going to cut off crypto completely, stoked by indications it was going to sever it from the banking system, appear to have “somewhat abated”, the Journal wrote.
Rich Rosenblum, co-founder and president of crypto trading firm GSR, said: “There are dozens of other banks, both onshore and offshore, that are taking advantage of this opportunity.”
After the collapse of Signature, one banker said he was so inundated with calls and applications for new banking that he had to put his phone on “Do Not Disturb” mode in order to get a night’s sleep.
“We clearly just want to diversify the options that we have,” said Crypto trading firm B2C2 Ltd. CEO Nicola White. The company is in the process of applying for 20 bank accounts across multiple currencies. Michael Shaulov, chief executive of crypto-infrastructure startup Fireblocks Inc., said: “We believe that there is a set of U.S. banks that is likely to onboard some of the crypto firms, with a smaller concentration in each bank than previously.”
Smaller banks usually take more time to establish accounts, as they are more selective about who they do business with. Banks are eager to walk a fine line, minimizing their exposure to crypto so as to avoid the ire of regulators, but still keeping the doors open to new deposits.
A perfect example of such a fine line is when a spokesman for Fifth Third bank told the Journal the bank didn’t directly handle crypto, but added: “We recognize the need that all companies, including digital asset companies, have for traditional banking services including payroll, benefits, and accounts payable.”
Bob Rutherford, vice president of operations at FalconX, concluded: “Losing SEN and Signet is operationally disruptive, but there are a number of regionals that are also building out these networks and services.”
“The closure of Signature and Silvergate has prompted an increase in inquiries from prospective clients. As a regulated bank and digital asset custodian we can offer firms who meet our strict compliance and risk requirements access to an integrated solution,” said Puerto Rico’s FV Bank CEO Mile Paschini.