“Whack-a-mole of banking activity.”
That was how Circle CEO Jeremy Allaire described the current crypto banking climate, when I caught up with him Wednesday. And he’s right! Over just a few short days, crypto-focused banks Silvergate Bank and Signature Bank and startup favorite Silicon Valley Bank all collapsed.
While Silicon Valley Bank had counted some crypto companies among its vast number of startup clients, the Silvergate and Signature meltdowns were especially disruptive for the crypto sector. Not only did many crypto startups bank with the two of them, but the banks also had dominant 24/7 instant U.S. dollar settlement networks—Silvergate Exchange Network and Signet. Those networks allowed heavyweight traders to convert money in and out of crypto currencies around the clock.
