Every March 12th is worth commemorating in the crypto world.

Last Wednesday, Silvergate Capital announced the end of operations and final liquidation; last Friday, SVB (Silicon Valley Bank) declared bankruptcy after suffering a $42 billion run; and on March 12, Signature Bank was directly closed by regulators.

Affected by this series of critical blows, Bitcoin fell to below $20,000, and USDC suffered a brief "de-anchoring" fluctuation. After the introduction of emergency rescue measures, the overall market has now rebounded, but more severe tests have arrived.

More and more banks will stay away from the crypto market under the dual pressure of market volatility and tightening regulations. As an important channel for deposits and withdrawals, which crypto-friendly banks are currently in the United States?

Either FTX will fail, or SVB will survive

The United States was once the most tolerant economy towards crypto banks. The Block compiled a list of crypto-friendly banks in 2020, including top banks such as JPMorgan Chase, as well as traditional community retail banks such as Silvergate Capital and Signature Bank.

But the collapse of FTX changed everything. In January 2023, the three U.S. banking regulatory departments, the Federal Reserve, the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC) jointly issued a statement, hoping that banks would better not get involved in crypto-related businesses and strictly review the compliance of various businesses.

Against this backdrop, several banks with close ties to crypto businesses, especially FTX, chose to exit the crypto market.

Crypto-friendly banks leaving the market

•JPMorgan

JPMorgan Chase itself launched the Onyx system, which allows multi-bank, multi-currency assets to be instantly transferred and cleared on a licensed distributed ledger. In February 2022, JPMorgan Chase launched Decentraland, becoming the first bank to set up services in the metaverse. In addition, it also focuses on providing cryptocurrency payment services such as cryptocurrency payment processing, blockchain technology solutions, etc.

However, in March 2023, JPMorgan Chase announced that it would sever its relationship with cryptocurrency exchange Gemini, which Gemini later denied. Coinbase also stated that it would continue to cooperate with JPMorgan Chase.

•Metropolitan Bank Holding Corp

On January 9, 2023, it chose to completely withdraw from the crypto market. Crypto business accounted for 1.5% of operating income, and crypto deposits accounted for 6% of total deposits. In 2023, the business relationship with the last four crypto customers will be terminated.

Since 2019, Metropolitan Bank has claimed that it has not attracted new cryptocurrency customers, but hopes to retain deposits from existing cryptocurrency customers, and after the regulatory documents are issued, it is expected to completely withdraw from the crypto market.

•Moonstone Bank（Farmington State Bank）

As of January 2023, the bank had approximately a few dozen cryptocurrency clients, and all crypto accounts had been effectively closed.

A year ago, in January 2022, Moonstone received an investment of $11.5 million from SBF's Alameda Research. In the Bahamas, liquidators found that Moonstone held nearly $50 million in FTX deposits in two accounts, and the current status of these funds is unknown. According to a motion filed by the Bahamian liquidator in December 2022, Moonstone executives refused to provide investigators with detailed information about the accounts.

Currently, Moonstone announced that it is "returning to its original mission as a community bank and ceasing to pursue an innovation-driven business model and no longer provide banking services to the crypto industry."

•Provident Bank

The bank's main entity responsible for crypto business is BankProv, whose business direction in the crypto field is mainly mining, providing crypto companies with services such as deposits, loans, wire transfers and ACH transfers, real-time payments and remote deposits. In addition, the startup Treasury Prime provides API connections to BankProv for crypto companies.

As of the end of 2022, its crypto mining loan portfolio was reduced to US$41.2 million, or a 50% decrease, and the loss in the third quarter of 2022 was US$27.5 million. Therefore, BankProv will gradually withdraw from the crypto mining loan business.

•Evolve Bank & Trust

In addition to FTX’s “involvement,” BlockFi also caused serious harm to Evolve Bank & Trust. Evolve previously issued credit cards for BlockFi’s customers and had some exposure to FTX.

Evolve stated that it did not provide loan services to FTX or its affiliates, nor did Evolve invest or trade in cryptocurrencies.

In addition to the four weak-willed banks mentioned above, there are still several truly friendly banks that stand with the crypto industry.

Crypto-friendly banks that are still holding out

•The Bank of New York Mellon

Bank of New York Mellon is the world's largest asset custodian, currently custodying more than 43 trillion in traditional assets, with a daily clearing volume of more than 2 trillion US dollars, and is the exclusive settlement agent for U.S. government bonds.

In March 2022, the issuer of the stablecoin USDC chose Bank of New York Mellon as its custodian. After Signature is closed, Circle will use Bank of New York Mellon for settlement.

•Customers Bank

Customers Bank uses its self-developed CBIT token to exchange US dollar cash between customers. CBIT tokens can be used in conjunction with the TassatPay payment platform, a B2B instant transfer system based on blockchain technology.

Thanks to the real-time and security of blockchain transactions, the bank can absorb and benefit from a large amount of low-cost deposits, providing huge liquidity and expanded net interest margins to drive aggressive loan growth. The bank announced $1.5 billion in deposits from its cryptocurrency business in its third quarter 2021 earnings report.

After the FTX incident, Customers Bank announced that it had no deposits or other business dealings with FTX or any affiliated companies, nor did it provide loans to any customers in the confidential industry.

After SVB and Sinagture Bank went bankrupt, USDC issuer Circle still kept some reserves in Customers Bank.

•Cross River Bank

In April 2022, Cross River Bank completed a $620 million financing led by a16z. Its main business module is BaaS (Banking as a Service). BaaS components cover payments, including card swiping, account transfers, and real-time payments. Services can be provided for current deposit accounts, savings accounts, and credit and debit cards.

Coinbase and Circle are both its customers. After SVB, Circle announced that starting from March 13, 2023, Cross River Bank will provide customers with the service of minting and redeeming USDC.

•Pathward

Similar to Cross River Bank, it is also a bank that provides BaaS (Banking as a Service). It cooperates closely with Coinbase and is also a co-issuer of Coinbase Card, providing it with credit card issuance related services.

Pathward is also an FDIC-registered bank, providing customers with deposit insurance services up to $250,000.

Indirect access to crypto-friendly banks

In addition to banks that directly provide services to crypto companies or customers, there is also a special banking system that contacts crypto companies indirectly or in a cooperative manner.

•FirstFoundation Bank

First Foundation Bank has partnered with NYDIG to allow users to trade Bitcoin through an application, where customers can buy, sell and hold Bitcoin. However, customers do not actually own any specific, on-chain, identifiable Bitcoin, but rather a specific amount and interest reflected in their personal NYDIG Bitcoin account.

At the same time, NYDIG transfers the funds from all customer Bitcoin sales to the bank, which deposits the proceeds from the Bitcoin sales into your selected First Foundation Bank personal account to complete the transaction.

•Sutton Bank

Sutton issued support for CashApp and prepaid cards to indirectly support crypto services. However, the official statement is that Sutton Bank is only the card issuer, and users can use CashApp to use the funds in the card, but any historical records of funds in the APP cannot be queried through the online banking account.

As for Robinhood's debit card, Sutton does not assume any customer support functions, and the card usage agreement is entirely set by Rboinhood.

•Quontic Bank

Quontic Bank uses Bitcoin as a form of rebate reward for card transactions. The minimum deposit requirement for users is $500, and 1.5% of the amount of each transaction will be accumulated in Bitcoin denominated in US dollars as a reward. However, ATM withdrawals, transfers, bill payments, ACH payments, and wire transfers will not earn Bitcoin rewards.

Conclusion: Beyond the Thunderstorm

In addition to affecting the U.S. banking system, this bank collapse also had a certain impact on banking systems in other regions. Due to regulatory policies, not all banks can provide U.S. dollar services, but there is still a glimmer of hope, mainly some European banks, especially Swiss banks, such as SEBA and Sygnum, two major crypto-friendly banks, as well as traditional large banks such as Vontobel and Swissquote.

There are also a number of small European countries, such as LHV Pank in Estonia, Gorenjska Banka in Slovenia, Bank Frick in Liechtenstein, and BlueOrange Bank in Latvia.

and offshore countries, such as PacificPrivate Bank in Vanuatu, DeltecBank and Ansbacher in the Bahamas.

Overall, the U.S. banking industry will usher in a larger-scale shift. In 2020, the OCC (Office of the Comptroller of the Currency) launched a payment charter, allowing crypto companies such as Kraken/Paxos to enter the national financial system.

After the FTX collapse and the collapse of three banks last week, regulatory policies have already intervened in the banking system. Whether banks will embrace crypto companies again in the future remains to be seen.