Client Bank Reportedly Buys Back Crypto Hedge Funds Amid FDIC Warning
Customer Bank, which serves major cryptocurrency companies, among them Galaxy Digital, Coinbase and Circle have begun cutting off some hedge fund clients. According to people familiar with the matter, the Pennsylvania-based bank reportedly decided to ’empty’ various funds, although the amount was not disclosed. One of the informants argued that this move only affects inactive accounts and is not as radical as bank liquidations in the industry.
Client Bank Tightens Crypto Hedge Fund Services
This comes after the collapse of Silvergate Bank and Signature Bank last year, which highlighted the problems crypto firms face in obtaining banking services in the United States. Customers Bank, a subsidiary of Customers Bancorp, deals in US dollars only and does not support cryptocurrencies or crypto lending products. Instead, it provides Customer Bank Instant Token (CBIT); A blockchain-based payment system operates 24 hours a day. USD Transactions involving more than a hundred digital asset companies.
A representative from Customer Bank stated that the bank is very selective in selecting customers, which is part of its risk management plan. “We had previously publicly disclosed our 15% risk limit in the CBIT vertical. Because of this policy, we are very demanding in terms of new business and conduct a lot of analysis on every sector we address,” the spokesperson explained.
FDIC Highlights Bankruptcy Risks in Banks
This banking shift is occurring against a backdrop of broader financial instability. Lately, Federal Deposit Insurance Corporation (FDIC) flagged potential bankruptcy risks in the US banking system, drawing attention to $517 billion in unrealized losses and determining that 63 banks were at risk. These concerns are further fueled by disappointing manufacturing data, with the ISM Manufacturing PMI pointing to a more pronounced contraction than expected.
This latest relaxation of the USA Federal Reserve expectations increased Bitcoin price and the cryptocurrency market in general. Currently, BTC price is trading in an uptrend with a price increase of 0.08% and currently stands at $71,145.
The Federal Reserve Board’s decision to end the Bank Term Funding Program (BTFP) on March 11 has further strained regional banks, reinforcing the risk environment that institutions like Client Bank must navigate.
So read: zkSync Era v24 Upgrade Goes Live on Mainnet
✓ Share:
Maxwell is a crypto-economic analyst and Blockchain enthusiast who is passionate about helping people understand the potential of decentralized technology. I write extensively on topics like blockchain, cryptocurrency, tokens, and more for many publications. My goal is to spread knowledge about this revolutionary technology and its effects on economic freedom and social well-being.
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. Neither the author nor the publication accepts any liability for your personal financial loss.
#Client #Bank #Reportedly #Buys #Crypto #Hedge #Funds #FDIC #Warning
