The US-based cryptocurrency advocacy group Blockchain Association has called on financial regulators to provide information on the potential “unbanking of crypto companies” following the bankruptcies of banks including Signature, Silicon Valley Bank and Silvergate. .
In a March 16 advisory, the Blockchain Association said he had submitted Freedom of Information Act requests to the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency for documents and communications that could potentially show that the actions regulators “inappropriately contributed” to the collapse of the three banks. According to Kristin Smith, CEO of the Blockchain Association, crypto businesses “should be treated like any other law-abiding business” in the United States with access to bank accounts.
“BA is investigating troubling allegations – including account closures and refusals to open new accounts – which have become more concerning following this week’s banking crisis,” said association. “A crisis that longtime crypto naysayers have rushed to blame, wrongly, on the technology.”
1/ TODAY: We have sent FOIA requests to the following government agencies, seeking information on the potential unbanning of legal cryptographic activity:
Board of Governors of the Federal Reserve System
and the OCC pic.twitter.com/vB4He5oQfY
— Blockchain Association (@BlockchainAssn) March 16, 2023
For many in the space, the recent banking crisis began with Silvergate’s parent company announcing on March 8 that it would be “closing operations” of the crypto bank. Silicon Valley Bank followed on March 10 with its own failure after a run on deposits, and the Treasury, Fed and FDIC announced the closure of Signature Bank on March 12.
At the time, a joint statement from regulators said the action against Signature was taken to “protect the U.S. economy by bolstering public confidence in our banking system.” However, former U.S. Representative and Signature board member Barney Frank reportedly claimed the FDIC was sending a “strong anti-crypto message” by shutting down the bank, and some lawmakers are demanding answers.
An FDIC spokesperson told Cointelegraph that the bidding process for banks interested in acquiring Signature and Silicon Valley Bank has begun. They suggested that recent reports that the FDIC asked potential buyers of failing banks not to support any crypto services may have been part of its “confidential marketing process.”
“An acquirer tells the FDIC what assets and liabilities of the failing bank it is willing to take, as well as what money (if any) will change hands,” according to the FDIC Resolution Handbook.
Related: US Crypto Regulation Is Happening ‘Behind Closed Doors’ – Blockchain Association CEO
Prior to its closure, many viewed Signature as a major crypto-friendly bank in the United States, providing services to Coinbase, Paxos Trust, BitGo, and Celsius. Some in the space have suggested that the perceived attack by federal regulators on banks serving crypto businesses could force companies to turn to “darker” options.