The crypto industry is facing a banking crisis in the United States, with major banks shutting down services for crypto companies. Citibank locked Swan Bitcoin out of its corporate bank account without any notice or explanation, leaving smaller firms particularly vulnerable. Silvergate and Signature, the two banks that were friendly to the crypto sector, have closed, leaving many crypto businesses unbanked and with few alternatives. The closure of these banks has prompted a search for new banking partners, and some firms may have to migrate to countries with more favorable regulations or struggle to raise venture capital due to lack of access to banking services.
Regulators’ statements and actions have added to the uncertainty for crypto businesses. In a joint statement, the Federal Reserve, FDIC, and OCC claimed that crypto represents a “significant risk” for banks, and the US Treasury and White House have warned banks to limit their exposure to crypto. While some in the industry see this as a coordinated attack reminiscent of Operation Choke Point, others attribute the bank closures to fragilities in the operating models of the banks involved. Regardless of the cause, the closure of Silvergate and Signature has left the crypto industry in a challenging position, with larger companies likely to hold on to their existing accounts while smaller ones scramble to find new banking partners. The industry may need to adjust to operating at a different pace without access to real-time payments, and some legitimate crypto companies may suffer due to the actions of less reputable businesses in the sector.