Crypto Firms Are Fleeing To Swiss Banks After Industry Collapse

With the largest crypto banks in the US collapsing, companies in the industry appear to be retreating to Switzerland in search of a financial lifeline.

Crypto-focused banks in the region are reporting increased traffic after Silvergate, Signature Bank, and Silicon Valley Bank (SVB) all failed in the past two weeks.

Where are crypto companies going?

SEBA Bank managing director Yves Longchamp told Reuters by email that the bank has seen a “sharp increase” in traffic from the United States, according to a report. report posted on monday. Representatives of the bank’s offices in Singapore, Hong Kong, Abu Dhabi and Switzerland also noted increased interest from US clients.

“Cryptocurrency firms and other money managers have already begun the onboarding process with many calls scheduled to take place in the coming weeks,” Longchamp wrote.

Meanwhile, the country’s Arab Bank has seen growing interest from crypto venture capital firms since early March, when doubts about Silvergate’s finances were raised. began to circulate.

Arab Bank’s chief treasury officer, Rani Jabban, said 80% of its increase in leads came from former Silvergate clients. However, regulatory issues surrounding the addition of US clients ultimately restrict the bank to absorbing one or two more companies at the most.

“I don’t see any bank also offering the structure that Signature and Silvergate were offering with their 24/7 internal blockchain settlement,” said Arab Bank’s Rani.

Banks like Silvergate have been a central lifeline for US crypto companies like Coinbase, Bitstamp, CryptoCom, and the now-defunct FTX. Some firms switched to Signature following the lead of the former. settlement last week, only for regulators to seize the final days afterwards.

The January audit of stablecoin issuer Circle reported that the bank held some of its USDC reserves in Silvergate, Signature, and SVB. The firm since then transferred all assets to Bank of New York Melon.

crypto attacking

Certain crypto industry leaders and lawmakers suspect that the sudden destruction of the country’s top crypto banks is not a coincidence, but a deliberate attempt by the government to drive the industry from its borders.

Republican Congressman Tom Emmer wrote in The FDIC on Wednesday questioned whether the agency had abused its authority to pressure banks not to serve crypto businesses. Additionally, Signature Bank board member and former House member Barney Frank, reclaimed there was “no objective reason” to shut down Signature other than sending a “strong anti-crypto message” to other banks.