Crypto companies are moving their money from banks to asset managers as the turmoil in global banks continue, but industry insiders don’t see the bank failures as the end of banking for the crypto sector.
The turmoil in the banking industry has so far led to three major bank failures in the US with the collapse of the crypto-friendly banks Silvergate, Silicon Valley Bank (SVB) and Signature Bank.
To mitigate further damage to the crypto industry, some companies are now taking a hard look at where and how they store their money, Bloomberg reported on Tuesday.
It added that many crypto companies have found it difficult to find new banking partners in the wake of the bank collapses, and said asset management firms – not traditional banks – now stand out as more attractive options for the industry.
Per the report, a growing number of crypto companies have reached out to Fidelity Investments and other asset managers for help, with one crypto industry executive telling Bloomberg that he has referred around 25 companies to Fidelity in the last three days alone to Fidelity. The companies included crypto market makers and venture firms focused on the crypto industry, he said, while adding:
“Fidelity isn’t a traditional bank, but they’re certainly safer than the tier-two-and-beyond banks.”
According to Tey El-Rjula, co-founder & CEO of crypto ramping company FLUUS, the failure of several crypto-friendly banks will be felt by the industry, but it is unlikely to pose any major problems.
“it’s important to note that the crypto industry is incredibly resilient and has shown the ability to adapt to changing circumstances,” El-Rjula said in a comment shared with Cryptonews.com.
He added that many other financial institutions are currentlyRead more on cryptonews.com