Recent actions by the Biden administration’s financial regulators have raised concerns over government interference in the banking industry, particularly targeting crypto-friendly institutions. Banks like Silvergate and Signature, both solvent, were forced to shut down or sell off their assets due to regulatory pressures, leaving many questioning the administration’s motives.
Silvergate Bank, once a leader in crypto banking, was able to withstand a significant bank run following the collapse of FTX. Despite this, the Federal Reserve imposed new guidelines that required Silvergate to reduce its crypto exposure to a fraction of its business. This left the bank with no viable path forward, forcing it to close its doors.
Former Silvergate executive Elaine Hetrick has provided sworn testimony confirming that the bank’s downfall was not due to poor management but rather the result of regulatory overreach. Hetrick’s testimony sheds new light on the Federal Reserve’s decision to limit Silvergate’s crypto dealings, essentially killing the bank’s business model.
The Biden administration has denied involvement, but critics argue that the evidence is clear. Signature Bank, which was sold off, also faced similar regulatory pressures, with none of its crypto-related assets being included in the sale. This further highlights the government’s efforts to stifle the crypto industry by cutting off banking access.
Many in the financial and crypto industries are calling for greater scrutiny of the administration’s actions, claiming that the crackdown on crypto banking is not only harmful but illegal. The full extent of the impact is still unfolding, but the damage to the U.S. crypto industry may be long-lasting.
