Cryptocurrency Financial News
A debate from the 2008 financial crisis resurfaces as the FDIC intervenes to help two troubled institutions with crypto connections, says CoinDesk’s David Z. Morris.
As the wreckage that started inside crypto banking threatens financial institutions beyond the sector’s border, the federal government is eager to make it clear that it’s not going to let it get out of hand. But is it a bailout?
Loans and other services will resume on normal schedule Monday following a switch to a new bridge bank, the regulator said
Billionaire Bill Ackman said that SVB’s senior management made a “basic mistake” but should be fired.
In its first statement following the collapse of Silicon Valley Bank, Circle declined to state how much cash it has tied up at the bank.
For all the angst this week about how troubles in the crypto industry are fueling a banking crisis, the reality, so far, is actually something else: Of the two banks that went under, the one squarely focused on crypto – Silvergate Capital – escaped the black mark of a federal bailout.
The crypto market is taking a walloping, and there are three important reasons why BTC’s $380 billion valuation is a key support for the entire market.
The Federal Deposit Insurance Corporation has taken over Silvergate Bank, which saw prominent customers abandon it and its stock price plunge after revealing it faced regulatory scrutiny and had to sell assets to pay off loans.
Officials from the government agency reportedly entered Silvergate’s headquarters last week, with discussions revolving around how to salvage the crypto bank.
Silvergate Bank had a really rough week, to the point where a not-insignificant number of people were waiting for the Federal Deposit Insurance Corporation (FDIC) to announce the bank had entered receivership after close of business Friday.
FDIC examiners met with Silvergate management at its headquarters in California last week.
Silvergate Bank lost more than $8 billion in deposits from its crypto customers in the final months of 2022 as its core block of business crumbled under the industry’s implosion – just as the bank’s regulators had predicted might happen for such institutions.
Silvergate Bank is being hollowed out as its customers retreat following the disclosure that it has to reassess its financials and may not be a “going concern” within a year. The prominent California-based crypto bank’s future gets increasingly murky.
Rep. Patrick McHenry, chairman of the House Financial Services Committee, and Sen. Cynthia Lummis teamed up on a letter questioning regulators about crypto accounting policy.
The Federal Reserve and other U.S. banking agencies are warning banks that crypto poses significant liquidity dangers, according to a joint statement issued Thursday, further reinforcing their campaign to generally steer lenders away from digital assets.
The agency issued a cease-and-desist letter on Wednesday.
Martin Gruenberg answered affirmatively to Senator Bob Menendez that there were “no cryptocurrency firms backed by the FDIC” and its coverage did not include crypto “of any kind.”
Martin Gruenberg was the FDIC’s acting chair while the agency issued cease-and-desist orders to crypto firms and suggested that payment stablecoins merited further consideration.
The government agency said that while deposits at insured banks were covered for up to $250,000, no such protections applied to those at crypto companies.
“Establishing clear regulatory expectations will be paramount to give this market an opportunity to grow and mature in a responsible manner,” said Jelena McWilliams.
