Background of the Recent Bank Closures
The cryptocurrency world has been buzzing lately—as if it were the latest TikTok dance craze—with news of crypto-friendly banks facing unprecedented turmoil. Notably, the collapse of Silicon Valley Bank and the sudden closure of Signature Bank left many crypto companies reeling. In a quest for transparency, the Blockchain Association (BA) has taken matters into its own hands by filing inquiries seeking information on these tumultuous events.
What is the Blockchain Association Up To?
On April 14, 2023, the Blockchain Association announced a wave of Freedom of Information Act requests aimed at federal regulators. Their goal? Unravel the concealed stories behind the recent closures of crypto-centric banks. They are seeking clarity from the Federal Housing Finance Agency (FHFA) and the New York Department of Financial Services (NYDFS) regarding the reasons behind these bank failures.
FOIA Requests Galore!
The BA’s initial inquiries were about the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, and the Office of the Comptroller of the Currency. They clearly have a hunger for knowledge—much like a kid in a candy store, though hopefully less sticky.
The Big Questions at Hand
So, what are the essential questions the Blockchain Association is grappling with? Here are some standout inquiries:
- Was Signature Bank’s shut down due to actual insolvency, or was it an intentional anti-crypto message despite being solvent?
- Did the Federal Home Loan Bank of San Francisco take politically motivated steps in pulling loan support for Silvergate, contributing to its downfall?
The Ripple Effect of Bank Closures
The collapses have left a significant impact on the crypto landscape, making us recognize that the world of cryptocurrencies is not just about a bunch of kids trading digital coins. With Silvergate’s parent company announcing it would wind down operations and Silicon Valley Bank crumbling under pressure, the implications for crypto firms are profound. These closures raise concerns about the overall health and future of crypto banking.
BA’s Ongoing Advocacy
Aside from seeking financial transparency, the Blockchain Association isn’t sitting back. Their activism includes filing a brief over the sanctioning of Tornado Cash, indicating that they are pulling out all the stops to defend the rights of the crypto sector against what they deem unfair treatment. With a history of pumping $1.9 million into lobbying efforts last year, they know how to throw some serious weight around in politics!
The Future of Crypto and Banks
The turbulence at crypto-friendly banks certainly raises more questions than answers. As cryptocurrency continues to evolve, the relationship between banks and crypto entities will need to be carefully navigated. Who knows? Maybe one day, crypto banks will be orthopedists, fixing all the broken trust in finance.
