The U.S. Federal Deposit Insurance Corp. (FDIC) has left the banks it oversees unequipped to navigate the regulator’s crypto expectations, according to the agency’s inspector general, so the FDIC agreed to field a new strategy by January.
Crypto highlighted as ‘novel and complex’ risk to US banks: FDIC report
The FDIC warns that uncertainty around crypto’s legal status, the likelihood of fraud and contagion present key risks to United States banks.
Circle Was Top Depositor Aided by SVB Government Rescue: Bloomberg
The FDIC guarantee included over $3.3 billion the USDC stablecoin issuer held at the lender.
OKCoin Accused by FDIC of Making False Claims About Customer Protections
OKCoin must scrub misleading statements that suggest its customers’ accounts are protected by the U.S. Federal Deposit Insurance Corp. (FDIC), the U.S. banking regulator ordered late Thursday, complaining the company is making false claims.
If Over 2,300 Banks In America Are Bankrupt, Will Bitcoin Break Above $40,000?
The United States banking system is in trouble as over 2,300 financial institutions could have more liabilities than assets, recent analysis reveals. Subsequently, analysts say this could boost Bitcoin prices in the weeks and months ahead if the government doesn’t proceed carefully.
US Banks Burning Through Capital Buffers
The US Treasury and Federal Reserve say that the problems are peculiar to just individual banks, but experts are warning that the situation is much worse than the government admits.
With the anti-inflationary measures in place, almost half of America’s 4,800 banks are burning through their capital buffers, and there is still more tightening to come from the Fed.
The full effect of monetary tightening by the Fed has yet to hit the economy, and only then would experts know whether the United States financial system will be able to safely deflate the excess leverage induced by extreme monetary stimulus during the pandemic between 2020 to 2021.
The White House did not offer a blanket guarantee for all deposits because that would look like social welfare for the rich. Besides, the Federal Deposit Insurance Corporation (FDIC) reportedly has only $127 billion of assets and may require its own bailout.
For that reason, financial institutions are now pressuring the United States Securities and Exchange Commission to crack down on short-selling strategies that profit when bank stocks slide.
Lindsey Johnson, CEO of the Consumer Bankers Association, urged policymakers to take a serious look at the financial havoc wreaked by short-sellers.
Bank Failures Could Drive Bitcoin Prices
The turmoil in the banking industry is a concern for the Biden administration. If thousands of banks in the United States were to fail, it is possible that some investors could turn to Bitcoin as a way to protect their assets.
With the Biden administration’s stance on cryptocurrencies, any action that places the banking system in jeopardy could drive Bitcoin prices higher, even above $40,000.
The SEC is not currently contemplating any ban on short-selling bank stocks, according to a senior agency official.
In 2008, the SEC called time-out on short-selling on nearly 1,000 financial stocks in a bid to restore faith in public markets. However, the New York Fed later found that the ban did little to stem the financial stock market that was flaying out of control.
Another study discovered that most of the stocks protected by the ban lost the citizens’ confidence, suffering “a severe degradation” in market quality, price impact, and volatility.
As financial institutions press the SEC to take action against short-sellers, and their role in the market, which is impacting Americans’ confidence in the financial system. Yet, any careless moves to pull the pin could create more fissures, possibly buoying crypto and bitcoin prices.
Ethereum price outlook weakens, but ETH derivatives suggest $1.6K is unlikely
Another top 20 U.S. bank bites the dust, but Ether’s price fails to benefit from the event.
Will $28K Bitcoin price hold? Two indicators remain solid despite 5% pullback
BTC margin markets and futures’ long-to-short indicator show professional traders unwilling to bet on Bitcoin’s price dropping.
First Republic’s crisis is not an isolated incident – suggests JPMorgan exec
The CIO of JPMorgan Asset Management said it’d be “naive to say that this is just limited to First Republic.”
FDIC alleges Cross River engaged in ‘unsafe’ lending practices
Cross River is yet to admit nor deny the allegations that it “engaged in the unsafe or unsound banking practices” related to its lending activity in 2021.
Signature Bank Failed Because of Mismanagement, Contagion, FDIC Report Says
The federal banking regulator said Signature’s exposure to crypto industry deposits was also a contributing factor to its failure.
$1.12B in Bitcoin options expire this week, and bulls appear to be at a disadvantage
Commodities rallied as the U.S. Treasury struggled with the banking crisis, but Bitcoin bulls also overplayed their hand in this week’s options expiry.
Fed liquidity injections drive down US Treasury yields, but not Bitcoin price
Regulatory uncertainty and the recent enforcement actions taken against major crypto exchanges reduces the odds of Bitcoin breaking above $30,000 in the short-term, but investors are still bullish.
That Binance Suit Sure Seems Bigger Than Just a CFTC Case
Between Coinbase, Binance, Justin Sun, Do Kwon and Custodia, there has been just so much news over the last week. And that’s largely just the U.S. But Binance is the most interesting, not only for what happened (the Commodity Futures Trading Commission sued it), but also for what didn’t (the Department of Justice hasn’t filed anything). Plus, the CFTC’s Tech Advisory Committee met last Wednesday.
The Short-Sightedness of Run-Amok Regulators
Ric Edelman, founder of the Digital Assets Council of Financial Professionals, talks about a key reason why crypto’s future looks bleaker: an apparent effort to cut it off from U.S. banks.
Signature’s crypto clients told to close their accounts by April 5: Report
Any crypto deposits not transferred to another bank by April 5 will be liquidated and a check mailed to the client’s address.
FDIC Gives Deadline Next Week for Crypto Depositors Stranded by Signature Failure
The Federal Deposit Insurance Corp. (FDIC) is trying to hurry the stranded crypto customers out the door of the temporary entity that holds the assets of the former Signature Bank, asking them to cash out by next week – whether they have a new bank or not.
U.S. Bank Regulators Investigating Leaders of the Failed Tech Banks
The Federal Deposit Insurance Corp. is investigating the actions of the leaders of Signature Bank and Silicon Valley Bank to hold them accountable for their collapses, said Chairman Martin Gruenberg, who detailed their mismanagement and dangerous business concentrations – especially in digital assets at Signature – in testimony prepared for a U.S. Senate hearing.
First Citizens to Buy Silicon Valley Bank’s Deposits, Loans in $55.5B Agreement With FDIC
Federal Deposit Insurance Corporation says the 17 former branches of Silicon Valley Bank will re-open as First Citizens Bank & Trust Company on Monday, March 27.
Bitcoin Emerges as Safe Haven as Traditional Finance Faces Turmoil
Conflicting data creates the question of how the Fed will react to both rising inflation and failing banks – and whether bitcoin will be a lifeboat.
The Reality Behind the Crypto Banking Crackdown: ‘Operation Choke Point 2.0’ Is Here
Banking enforcement targeting legal crypto businesses appears to violate the FDIC’s mandate. It may also be amplifying financial contagion.