Mar 04, 2023
Silvergate Bank Loses Five Crypto Partners Amid Investigations and Lawsuits
Crypto firms have long struggled to find suitable banking partners due to the lack of clear regulations in the space. The recent Silvergate Bank saga has only exacerbated this problem, as five notable crypto firms have cut ties with the prominent lender. Digital Asset Capital Management (DACM), a crypto hedge fund with over $400 million in assets, is now looking for a new banking partner in Switzerland.
On March 2, Coinbase, Circle, Paxos, Galaxy, and CBOE all terminated their service with Silvergate Bank. Silvergate was popular with crypto companies due to its real-time bank transfer services, which allowed for quick and easy fund transfers. With Silvergate out of the picture, DACM co-founder Richard Galvin told Bloomberg that finding a new partner could take time, and the firm is “speaking to some Swiss banks.”
Switzerland has been one of the first countries to regulate and offer banking licenses to crypto banks. SEBA Bank AG, for example, is a fully-regulated institution that secured a banking and securities dealer license from the Swiss Financial Market Supervisory Authority in August 2019.
In the U.S., Signature Bank seems to be the next popular fintech bank of choice for crypto companies. Coinbase had already shifted its prime customer’s banking transfers to Signature Bank. However, in December 2022, Signature Bank announced its intention to withdraw up to $10 billion in deposits from clients holding digital assets, starting a general exodus from the cryptocurrency sector. The bank had already severed ties with Binance, discontinuing its SWIFT banking services for the crypto exchange.
The Silvergate saga has raised the difficulty level of transferring cash to crypto exchanges, and crypto firms are now struggling to find a reliable banking partner. NFTs, or non-fungible tokens, have become increasingly popular for crypto companies looking to promote their products and services. NFTs are digital assets that are unique and cannot be replicated or exchanged.
NFTs can be used for a variety of purposes, such as marketing campaigns, giveaways, and promotions. Crypto companies are now turning to NFT marketing agencies to help them create and launch successful NFT campaigns. These agencies can help companies create custom NFTs, launch campaigns on Twitter, and promote their NFTs on other platforms.
Crypto companies have a lot of options when it comes to selling NFTs, but finding a reliable banking partner is still a challenge. With the Silvergate saga making it even more difficult to transfer funds, crypto firms are now looking to NFT marketing agencies to help them promote their products and services.
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