Banks under pressure from U.S. authorities to cut ties with crypto firms
United States authorities appear to be resurrecting past techniques to crack down on crypto firms and banks offering services to the industry, several sources told Cointelegraph.
The alleged strategy consists of isolating the traditional financial system from the crypto market by relying on “multiple agencies to discourage banks from dealing with crypto firms,” with the goal of leading crypto businesses to become “completely unbanked,” according to Nic Carter — co-founder of venture firm Castle Island and crypto intelligence firm Coin Metrics.
The claims rely on conversations Carter had with bank executives, including crypto-native and traditional banks, he told Cointelegraph. “They tell me they are facing immense pressure from the Fed [Federal Reserve] and FDIC [Federal Deposit Insurance Corporation]. Founders are telling me that they can’t get bank accounts anywhere for new startups.” According to Carter:
Other recent regulatory events include a joint statement released on Jan. 3 by the Fed, the FDIC and the Office of the Comptroller of the Currency warning about the risks of banks engaging in crypto and encouraging them to refrain from doing so due to “safety and soundness” concerns. Also last month, Binance announced that it would only process U.S. dollar transactions over $100,000 due to a new Signature Bank policy.
In December 2022, Signature Bank announced its plans to reduce crypto services, return funds to customers and close their accounts. The bank reportedly borrowed nearly $10 billion from the U.S. Federal Home Loan Bank System in the last quarter of 2022 due to liquidity issues related to the bear market and the collapse of crypto exchange FTX.
“There is particular concern with crypto exchanges and related
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