- The FDIC is allegedly blocking buyers of failed Signature Bank from offering crypto services.
- Many see this as blaming the banking collapse on the crypto industry, including U.S. Representative Tom Emmer.
- Should crypto become the scapegoat for U.S. bank failures, it would add to the difficulties faced by crypto businesses operating in the U.S.
In the wake of the U.S. banking collapses that saw Silvergate, Signature, and Silicon Valley Bank all go under in a matter of days, some believe crypto is being scapegoated.
The FDIC is seeking bids from other financial institutions to buy failed lenders Silicon Valley Bank and Signature Bank. However, one of the caveats on purchasing Signature Bank by the FDIC is the halting of crypto servicing.
For U.S. Representative Tom Emmer, a staunch crypto supporter, it directly attacks the nascent financial sector. He took to Twitter to share a letter sent to FDIC Chairman Martin Gruenberg.
Emmer states the “FDIC is weaponizing recent instability in the banking sector to purge legal crypto activity from the U.S.”
Emmer believes that crypto should not be the scapegoat for the rumblings of a new banking crisis. Instead, he says:
“The recent instability in the banking sectors [was] catalyzed by catastrophic government spending and unprecedented interest rate hikes [these] are deeply inappropriate and could lead to broader financial instability.”
Regressing from an Internet Revolution
A lot of evidence has emerged to suggest the U.S. is becoming a hostile ground for crypto and the businesses operating in the sector. The SEC has come down hard on Ripple, Coinbase, and Circle – with the companies chastising the regulator’s approach.
On top of that, the failure of three crypto-friendly banks will make things more complicated for crypto companies to operate in the space. The FDIC’s alleged scapegoating of crypto also means the future looks bleak for innovative technology in the States.
Cathie Wood, CEO and CIO of Ark Invest, has also taken to Twitter to join Emmer’s lambasting of the U.S. regulatory approach to Crypto.
Wood said: “While the US banking system was seizing up in response to bank runs threatening regional banks, Bitcoin, Ethereum, and other crypto networks didn’t skip a beat.”
On the Flipside
- While the U.S. banking and financial sector is in a crisis, impacting crypto businesses, the price of Bitcoin has risen by 15% in the last seven days.
Why You Should Care
Suppose the FDIC is aiming at crypto and making future banking for crypto in the U.S. difficult. In that case, the companies currently in the U.S. will face hostilities on three fronts– regulations, lack of current banking options, and blocking future crypto banking options.
Read more about crypto banking options in Europe:
U.S. Banking Collapse: Crypto to Be Served by HSBC, Santander & Deutsche Bank in Europe.
Read about how Binance prioritizes TUSD over BUSD:
Binance’s New Flame TUSD Secures Zero-Fee BTC Trading as BUSD Sinks.