“No one left to bank crypto companies” — Crypto Twitter responds

Crypto companies could find it more difficult to access traditional banking partners with the loss of two major crypto-friendly banks in less than a week, according to some in the crypto community.

On March 12, the Federal Reserve announced the closure of Signature Bank as part of “decisive actions” to protect the US economy, citing “systemic risks”. It came just days after the shutdown of the US bank – Silicon Valley Bank – which was ordered to close on March 10.

A week earlier, Silvergate Bank, another crypto-friendly bank, announced that it would close its doors on March 8 and voluntarily liquidate.

At least two of these banks were seen as important banking pillars for the crypto industry. As of December 31, Signature Bank had $88.6 billion in deposits, according to insurance documents.

Crypto investor Scott Melker, aka The Wolf Of All Streets, like many others who took to Twitter following the news, believes that the collapse of the three banks will leave crypto companies “basically” without banking options.

“Silvergate, Silicon Valley and Signature are all closed. Depositors will be made healthy, but there is basically no one left to bank crypto companies in the US,” he said.

Meltem Demirors, Chief Strategy Officer of digital asset manager Coinshares shared similar concerns on Twitter, highlighting that in just one week, “crypto in America is bankless.” She noted that SEN and SigNet are “the most challenging to replace”.

Signature Bank’s Silvergate Exchange Network (SEN) and Signet were real-time payment platforms that allowed commercial crypto customers to make real-time dollar payments at any time.

Their loss could mean that “crypto liquidity could be somewhat compromised,” comments Nic Carter of Castle Island Ventures in a March 12 CNBC report. He noted that both Signet and SEN were key for companies to get fiat, but he hopes other banks will step in to fill the gap.

Others believe the closing of the three companies will create room for another bank to step in and fill the vacuum.

Jake Chervinsky, head of policy at crypto policy promoter the Blockchain Association, said the bank closures will create a “huge hole” in the market for crypto-friendly banking.

“There are many banks that can seize this opportunity without taking the same risks as these three. The question is whether banking regulators will try to get in the way,” he added.

Meanwhile, others have suggested there are already viable alternatives.

Mike Bucella, General Partner at BlockTower Capital, told CNBC that many in the industry are already moving to Mercury Bank and Axos Bank.

“In the short term, crypto banking in North America is a tough place,” he said.

“However, there is a long tail of challenger banks that can pick up that slack.”

Ryan Selkis, CEO of blockchain research firm Messari, noted the incidents have closed “Crypto’s bank rails” in less than a week, with a warning for the future for USDC

“Next, USDC. The message from DC is clear: crypto is not welcome here,” he said.

“The entire industry should fight like crazy to protect and promote USDC from now on. It is the last stand for crypto in the US,” added Selkis.

Circle, the issuer of the USDC stablecoin, confirmed on March 10 that the threads initiated to remove balances have not yet been processed, leaving $3.3 billion of its $40 billion USDC reserves at Silicon Valley Bank (SVB) .

Related: Silicon Valley Bank Collapse: Everything That Has Happened So Far

The news led USDC to teeter against its peg, sometimes dropping below 90 cents on major exchanges.

However, as of March 13, USDC is climbing back to its $1 peg after confirmation from CEO Jeremy Allaire that its reserves are safe and the company has new banking partners lined up.