After three major banks linked to crypto companies collapsed, software engineer Molly White believes that companies now looking at banking options must face “shadier” solutions.
Speaking on March 14 at the South by Southwest (SXSW) panel in Austin, Texas on ‘Popping the Web3 Bubble’, White opined that the options of crypto companies after the collapse of the crypto-friendly Signature and Silvergate could push them metaphorically in soil. White compared the situation in 2017 and 2018, when crypto projects had “problems accessing banking” with a lack of knowledge and acceptance from institutions.
“There are only a few US banks that are really game to take on crypto clients,” White said. “With Signature and Silvergate both out of the picture, I think that will have a huge impact on the crypto industry. [which] still need access to traditional finance and US banking rails.
He added:
“Without [Signature and Silvergate], I think the crypto industry is going to have a tough time. They have to find other banks that are willing to work with them, which is already difficult, and will probably be even more difficult after these banks collapse, or they have to go to some kind of darker shadow bank.”
Many in and out of the space have claimed that the New York Treasury Department’s shutdown of Signature Bank was an overreach by authorities due to the company’s connections to crypto companies. Signature board member and former US Representative Barney Frank suggested US government officials were trying to send a “strong anti-crypto message” when closing the bank, while New York regulators reported that Signature failed to provide “reliable and consistent data” on its activities. .
related: The new contagion is ‘TradFi to crypto’ and not vice versa – Circle policy director
The SXSW conference in Austin will take place until March 19 and features many speakers from the crypto and blockchain space. Cointelegraph published an interview with activist and cybersecurity expert Chelsea Manning about how blockchain technology can be used to solve challenges with artificial intelligence.