In the wake of three major banks with ties to crypto firms collapsing, software engineer Molly White believes companies now looking at banking options may have to face “shadier” solutions.
Speaking on March 14 at a South by Southwest (SXSW) panel in Austin, Texas on ‘Popping the Web3 Bubble’, White opined that crypto firms’ options following the collapse of the crypto-friendly Signature and Silvergate banks may drive them metaphorically underground. White compared the situation to that in 2017 and 2018, when crypto projects had “trouble accessing banking” with less knowledge and acceptance from institutions.
“There were only a handful of U.S. banks that were really game to take crypto clients,” said White. “With Signature and Silvergate both out of the picture, I think that’s going to be very impactful on the crypto industry [which] still really needs access to traditional finance and to U.S. banking rails.”
“Without [Signature and Silvergate], I think the crypto industry is going to be having a tough time. They’re either going to have to find other banks that are willing to work with them, which was already tough, and will probably only be tougher after the collapses of these banks, or they’re going to have to turn to some of the sort of shadier shadow banks.”
Many in and out of the space have claimed the New York Department of Financial Services’ shutdown of Signature Bank was an overreach from authorities due to the firm’s connection to crypto companies. Signature board member and former U.S. Representative Barney Frank suggested U.S. government officials were attempting to send a “strong anti-crypto message” in closing the bank, while the New York regulator reportedly said Signature failed to provide “reliable and consistent data” on its activities.
The SXSW conference in Austin will be running until March 19 and feature many speakers from the crypto and blockchain space. Cointelegraph released an interview with activist and cybersecurity expert Chelsea Manning on how blockchain technology can be used to address challenges with artificial intelligence.