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With the largest crypto-supportive banks in the U.S. crumbling at the seams, industry firms appear to be retreating to Switzerland for a financial lifeline. 

Crypto-focused banks in the region are reporting higher traffic after Silvergate, Signature Bank, and Silicon Valley Bank (SVB) all effectively failed over the past two weeks. 

Where to Crypto Firms Go?

SEBA Bank managing director Yves Longchamp told Reuters via email that the bank has experienced a “pronounced uptick” in traffic from the United States, according to a report published Monday. Representatives from the bank’s Singapore, Hong Kong, Abu Dhabi, and Switzerland offices also noted more interest from American clients.

“Crypto firms and other money managers have already started the onboarding process and many calls are scheduled next weeks,” wrote Longchamp.

Meanwhile, the country’s Arab Bank has seen increasing interest from crypto venture capital businesses since early March, when doubts around Silvergate’s finances began to circulate

Arab Bank’s head of treasury, Rani Jabban, said 80% of its prospective client increase came from former Silvergate customers. However, regulatory issues around onboarding U.S. clients ultimately restrict the bank to absorbing an estimated one or two more firms at most. 

“I don’t see any banks also offering the structure that Signature and Silvergate were offering with their internal blockchain 24/7 settlement,” Arab Bank’s Rani said.

Banks like Silvergate have been a central lifeline for U.S. crypto businesses including Coinbase, Bitstamp, CryptoCom, and the now-defunct FTX. Some firms pivoted to Signature following the former’s liquidation last week, only for regulators to seize upon the latter days later. 

Stablecoin issuer Circle’s January audit reported that the bank held part of its USDC reserves across Silvergate, Signature, and SVB. The firm has since transferred all assets to Bank of New York Melon. 

Attacking Crypto

Certain crypto industry leaders and policymakers alike suspect that the sudden dirth of major crypto banks in the country is not a coincidence, but a deliberate government attempt to drive the industry from its borders. 

Republican Congressman Tom Emmer wrote into the FDIC on Wednesday questioning if the agency had abused its authority to pressure banks not to serve crypto companies. Furthermore, Signature Bank board member and former House member, Barney Frank, claimed there was “no objective reason” to close down Signature besides sending a “strong anti-crypto message” to other banks. 

The post Crypto Firms Are Retreating to Swiss Banks After Industry Meltdown appeared first on CryptoPotato.

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