Coinbase cutting ties with Silvergate forces crypto hedge fund to find a new bank
The popular fintech bank Silvergate Bank lost five crypto partners on March 2, owing to a slew of investigations and lawsuits against it.
Coinbase, Paxos, Gemini, BitStamp and Galaxy Digital were some of the most notable crypto firms that were using Silvergate as their banking partner. However, the termination of service by Coinbase has also forced a crypto hedge fund to look for an alternate banking partner.
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On March 3, a crypto hedge fund called Digital Asset Capital Management (DACM) with assets worth over $400 million announced they are looking for a new banking partner in Switzerland post Silvergate chaos. DACM used Silvergate’s real-time network to move funds to and from Coinbase Global Inc.’s platform.
DACM chief in an interview with Bloomberg said that even though there are certain banks in the U.S. that can handle crypto transactions, they are not crypto-focused as Silvergate. He added that finding a new partner could take some time and they are “speaking to some Swiss banks.”
Switzerland was one of the first countries to regulate and offer banking licenses to crypto banks. SEBA Bank AG (formerly SEBA Crypto AG) is a fully-regulated institution, having secured a banking and securities dealer license from the Swiss Financial Market Supervisory Authority (FINMA) in August 2019.
Silvergate was popular with crypto companies because of its instant and real-time bank transfer services. Thus, it might take longer to move funds in absence of such facilities. Currently, in the U.S., Signature bank seems to be the next popular fintech bank of choice for crypto companies. Coinbase had already shifted its Prime customer's banking transfers to the
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