Note that last week, digital asset lovers were faced with the closure of another bank that treated cryptocurrencies well. We’re talking about Silvergate, which serviced large cryptocurrency companies, meaning it allowed the latter to conduct fiat coin deposit and withdrawal transactions.

The bank was particularly important because of the Silvergate Exchange Network (SEN) system, which allowed the participants of this network to interact. The platform did a great job, causing it to be used by industry giants such as Coinbase, Circle, Binance.US, Gemini and other popular companies. Read more about the history in a separate article.

Now another bank that has been catering to cryptocurrency companies has been made aware of the problems. And while some financial institutions are still interacting with blockchain platforms, such a trend is troubling in any case.

Why banks are closing down

On Sunday, US Federal Reserve officials issued an official statement, according to which Signature’s termination was discussed with the FDIC. The bank closed de facto as recently as a week ago, and now the entire process has been formalised legally “to protect the US economy and strengthen faith in the banking system”.

The problem with Signature specifically for the crypto market is that some large companies have held their funds there. We're talking about Coinbase, Paxos and Celsius, who have already admitted their association with the institution. The first two lost $240 million and $250 million respectively, although the companies have been promised that the money will be repaid in full. Representatives of Celsius have not disclosed the extent of their losses, with the company already in bankruptcy.

A senior US Treasury official told Cointelegraph that today’s actions by the NYDFS and the US Federal Reserve were conducted to limit the outflow of depositor funds and prevent a “domino effect” from the collapse of other banks. Here is the relevant official’s rejoinder.

The actions we took today were aimed at limiting the impact of depositor outflows from Silicon Valley Bank and Signature. The organisations are not bailed out. Depositors are protected.

SVB is another bank that suffered a collapse last week. What happened to Silicon Valley Bank the day before affected some of the crypto market’s stablecoins. For example, Circle’s USD Coin token lost its peg to the US dollar for a while due to a massive sell-off amid a panic over Silicon Valley Bank holding 8 percent of its reserves. However, today the USDC exchange rate has returned to $1, well the government has decided to save the deposit holders in SVB.

As you can see, even the leadership of the Federal Reserve and other US government agencies got involved in what was happening. The collapse of two major banks in a short time is a serious blow to the reputation of the banking sector of the country, so the government will do everything necessary to minimize the consequences.

Larry Chermack of The Block responded to the developments. He noted that three major US banks that interacted with cryptocurrency companies have been shut down in the last week. According to Larry, some of the remaining institutions are still willing to do business with blockchain projects. They are Customers Bank, First Foundation Bank, Cross River Bank, Sutton Bank, Evolve Bank & Trust, BankProv and Quontic Bank.

Of course, there is also JP Morgan and BNY Mellon, but only large cryptocurrencies can cooperate with them. So there is no chance for small startups to cooperate with them.


As you can see from the list at the end, US cryptocurrency companies still have financial institutions to work with. However, the trend is a bit wary, as Silvergate and Signature were shut down in the same week.

Obviously, blockchain giants here can only hope for a rapid launch of a bank from cryptocurrency exchange Kraken, whose imminent launch was confirmed by a company spokesperson the day before. It will surely be open to cooperation with cryptocurrency companies without any problems. This means that the US segment of digital asset companies will have a reliable partner.