Crypto firms Turn to Swiss Banks After Silvergate and Signature Fall

Earlier this month, two major banks in the US, namely Silvergate Capital and Signature Bank, known for their crypto-friendly policies, were closed down. This move by US regulators to tighten their control over banking institutions has prompted crypto firms to seek banking partnerships outside of the US.

According to a recent report by CNBC, many of these crypto firms have turned to Swiss banks that are also friendly to the crypto industry, and have been inundating them with requests for banking services. While digital assets have demonstrated resilience in the midst of the banking crisis, it remains a fact that crypto firms still require banking partners for liquidity purposes.

Following the closure of Silvergate Capital and Signature Bank, the two largest lenders for the crypto industry, crypto firms are turning to Swiss banks for support. In recent years, Switzerland has established itself as a hub for the crypto sector, implementing clear regulatory guidelines.

According to an anonymous advisor at a private Swiss bank, the bank has been overwhelmed with requests for services from crypto firms. The advisor noted that since the shutdown of Silvergate and Signature, there has been a flood of inquiries at the private bank, describing the situation as “just nuts.”

Interestingly, despite the recent turmoil at Swiss banks such as Credit Suisse, inquiries from crypto companies seeking potential banking partners have not diminished. Although the incident has pushed Switzerland's financial situation to the brink, it has not deterred crypto firms from exploring potential banking relationships.

US Crypto Firms Moving to Swiss Banks

Sygnum, one of the largest Swiss banks specializing in serving the crypto industry, has experienced a surge in inquiries. The bank has already obtained a Swiss banking license and a capital market license to operate in Singapore. According to Dominic Castley, the chief marketing officer at Sygnum, the bank has witnessed a significant increase in onboarding inquiries from various international locations as current banking industry events have unfolded. Castley added that the interest is mainly coming from investors, asset managers, and blockchain projects seeking to diversify their crypto investments with a reliable Swiss partner like Sygnum Bank.

Switzerland's clear regulations have become one of the major reasons why crypto firms are seeking banking partners in the country. The stable operating environment in Switzerland makes it an ideal choice for crypto players to operate here. Thierry Arys Ruiz, CEO of Swiss-based blockchain firm AgAu.io, noted that Switzerland is indeed more “stable,” and there is “more certainty to what the rules are.”

Switzerland has created several local hubs in the Zug region, known as “Crypto Valley,” to attract more crypto players to the country. With more and more crypto firms moving to Switzerland, the question arises: Will the US lose its stronghold in the crypto space？

Some US lawmakers and regulators have blamed crypto for the recent fall of three major banks in the country. However, Cathie Wood of Ark Invest believes that crypto is a solution to the central points of failure, opacity, and regulatory mistakes in the traditional financial system. If crypto is made the scapegoat for policy mistakes, it will move offshore, depriving the US of one of the most important innovations in history.

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