The Biden administration’s financial regulators are tightening control over the banking industry, specifically targeting banks involved with cryptocurrency. Banks like Silvergate and Signature, which were solvent, have been forced out of business, raising concerns about government overreach and the crypto industry’s future in the U.S.
Silvergate Bank, a boutique bank that primarily serviced crypto businesses, was among the first to voluntarily liquidate. Many believe this was due to pressure from the Federal Reserve, which imposed strict limits on its crypto dealings. Silvergate remained solvent even after major withdrawals following the collapse of FTX, but new guidelines made its business model unsustainable.
Critics argue that the Federal Reserve’s demands were unconstitutional, effectively driving Silvergate to shut down. “This is like telling Dunkin’ Donuts not to sell donuts,” said one analyst, referring to the restrictions that destroyed the bank’s ability to serve crypto clients.
According to testimony from former Silvergate executive Elaine Hetrick, the bank would have survived had it not been for the Fed’s interference. She confirmed that the bank remained stable after a series of withdrawals but couldn’t continue due to regulatory pressure. The Biden administration’s actions appear to be part of a broader effort to weaken crypto-related businesses.
Signature Bank, another casualty, was sold off with none of its crypto-related assets included in the sale. Many see this as further proof of a concerted effort by regulators to eliminate banks serving the crypto industry.
The controversy continues, with many calling out the Biden administration for targeting legal industries. As more evidence comes to light, critics demand accountability for what they call an illegal and unconstitutional campaign against crypto banking.
