Blockchain Association Files for Additional Info on Banking Closures
- The Blockchain Association, a crypto advocacy entity, has filed more Freedom of Information Act requests to NYDFS and the Federal Housing Finance Agency.
- The non-profit organization is seeking additional information on the recent closures of crypto-friendly banks in the US and the de-banking of crypto firms.
- This comes a month after the organization filed FOIAs to gain information from the FDIC, the OCC, and the Board of Governors of the Federal Reserve.
- The advocacy group is investigating if the regulators wanted to send an anti-crypto message despite the banks being fully solvent.
The recent closures of crypto-friendly banks in the United States have attracted the attention of the entire crypto industry, as many entrepreneurs believe that it was done to show that affiliation with crypto is dangerous. Interestingly, the non-profit organization dedicated to promoting a pro-innovation policy environment for the digital asset economy, the Blockchain Association, has filed more Freedom of Information Act (FOIA) requests to seek more information on the closure of these crypto-friendly banking institutions.
It is crucial to note that the blockchain advocacy group last week stated that it had sent FOIA requests to the Federal Housing Finance Agency and the New York Department of Financial Services (NYDFS). This comes a month after the Blockchain Association initially filed FOIA requests to gain information from the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, and the Office of the Comptroller of the Currency.
Another important fact to note here is that the Blockchain Association is also seeking information on the de-banking of crypto companies following the failure of popular crypto banks, Silvergate Bank, and Signature Bank, which were closed by the NYDFS a few weeks ago.
The non-profit organization confirmed that it seeks to “understand whether the closure of Signature Bank was the result of the bank’s insolvency or a decision to send an anti-crypto message despite the bank being fully solvent.”
Furthermore, the Blockchain Association is also investigating whether the collapse of Silvergate Bank was “the result of a politically-motivated decision by the Federal Home Loan Bank of San Francisco, which is overseen by the FHFA, to take the extraordinary and unusual action of pulling a loan made to Silvergate only months earlier.”
It is crucial to note that Silvergate Bank, a subsidiary of Silvergate Capital Corporation, announced that it would be unable to go through with its annual 10-K financial report and, as a result, lost the confidence of investors. While the crypto bank was in talks with the FDIC to prevent a possible breakdown, things did not go as planned.
As reported by Bitnation, Silvergate Capital Corporation decided to shut down the bank and added that the decision was made “in light of recent industry and regulatory developments” and multiple firms ending their relations with the crypto bank, including Coinbase, Paxos, Gemini, BitStamp, and Galaxy Digital. Furthermore, the bank’ liquidation plan involved the full repayment of the customers’ deposits.
On the other hand, Signature Bank, another crypto-friendly bank that had relationships with many crypto startups, was closed by the NYDFS in March. The bank had total assets of approximately $110.36 billion and total deposits of approximately $88.59 billion as of December 31, 2022.
According to Barney Frank, a member of the Signature Bank board and also a former US Congressman, the New York state regulators closed the bank because they “wanted to send the message that crypto is toxic.”
“They closed us even though there was no good, compelling reason to do that because they wanted to show that banks shouldn’t be involved in crypto,” said Frank. “We were the kind of poster child for having been involved in crypto.”