The extraordinary steps taken to save a pair of large European and American banks contrast sharply with what the Blockchain Association called a "disturbing trend" of de-banking.
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Banks and bank regulators closed ranks on Thursday to prevent two large banks, Credit Suisse and First Republic, from falling to the panic that doomed three smaller crypto-friendly banks in the last week.
A $54 billion loan from the Swiss National Bank enabled Credit Suisse to stabilize its finances and calm the European markets dragging bank shares down — a deal that gave the European Central Bank (ECB) the confidence to raise interest rates by an unexpectedly large 0.5 percentage points on Wednesday, Reuters reported.
In Washington, D.C., Treasury Secretary Janet Yellen, Federal Reserve Chairman Jerome Powell and 11 major banks came up with a plan to save First Republic — the 14th-largest bank in the U.S. — after depositors began pulling funds and its stock price tumbled in the wake of the failure of three crypto-friendly banks.
First Republic's troubles, which began in the wake of the collapse of Silicon Valley Bank late last week, were solved by the simple solution of bigger banks depositing $30 billion as a show of faith.
Coincidence or Not?
That comes at a time when main U.S. bank regulators have been accused by a high-ranking Congressman of using the bank crisis to "choke off digital assets" by letting three crypto-friendly banks — Silvergate, Silicon Valley Bank and Signature Bank — to fail, with the goal of pushing banks to stop doing business with crypto firms.
Now a day after Rep. Tom Emmer, the third-ranking Republican House member asked the FDIC chairman if his agency had "instructed banks under its supervision to not provide crypto firms banking services," a crypto industry association wants to know the same thing.
The Blockchain Association on March 16 announced that it has submitted Freedom of Information Act requests to the the Fed, the FDIC, and Hsu's Office of the Comptroller of the Currency (OCC) seeking "documents and communications involving the de-banking of crypto firms in the United States."
Blockchain Association head of policy Jake Chervinsky tweeted:
"There are troubling reports of crypto companies having their bank accounts closed, often with no notice and no explanation. They've struggled to open new accounts too. This disturbing trend suggests that regulators are trying to cut crypto entirely out of the banking system."
That comes as former Democratic Rep. Barney Frank, a member of Signature Bank's board and co-author of the Dodd-Frank bank reform act of 2008, accused regulators of killing the bank as a warning to stay away from crypto clients. He said in a Wall Street Journal op-ed:
"It wouldn't be the first time regulators saw an opening in a crisis to achieve a political goal by other means."
And on Thursday, Reuters reported that the FDIC had demanded that any prospective buyers of Signature Bank give up its crypto business — something the agency subsequently denied.
