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Banks Moving Away from Cryptocurrency Companies due to Regulatory Crackdown

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It is reported that some banks in the United States are moving away from cryptocurrency companies, because the crackdown by the United States regulatory author…

Banks Moving Away from Cryptocurrency Companies due to Regulatory Crackdown

It is reported that some banks in the United States are moving away from cryptocurrency companies, because the crackdown by the United States regulatory authorities may separate the digital currency from the real world financial system. After the bankruptcy of FTX last year, regulators expressed concern about the relationship between banks and cryptocurrency customers. The United States Securities and Exchange Commission (SEC) is actively cracking down on the larger players in the industry or reducing their scope of influence. People familiar with the matter said that the move has alerted bankers who are unwilling to deal with customers targeted by the SEC. Now bankers are reassessing all their exposure to encryption, no matter how small. A few small banks in the encryption field are reducing their exposure to the market or completely cutting off their links with the market. Banks that keep a distance from cryptocurrencies are making greater efforts to stay away from this business, close accounts and avoid customers with potential connections to the industry. Without bank cooperation, cryptocurrency companies are difficult to pay employees’ wages, and it is also difficult for customers to deposit or transfer money into digital currency.

People familiar with the matter: Banks are going their separate ways with cryptocurrency under the regulatory crackdown

Interpretation of the news:


The cryptocurrency industry has become a matter of concern for banks in the United States following the bankruptcy of FTX last year. The regulatory authorities in the country are now taking a closer look at the relationship between banks and cryptocurrency customers. This has made some bankers remain reluctant to deal with customers targeted by the United States Securities and Exchange Commission (SEC). Cryptocurrency companies are now struggling to pay their employees and customers are finding it difficult to deposit or transfer money into digital currency without bank cooperation.

As such, some banks have started to reassess their exposure to the cryptocurrency industry, regardless of how small. These banks are reducing their exposure to the market or completely cutting off their ties with the market. Some small banks in the encryption field are also following suit. Banks that have kept a distance from cryptocurrencies before are putting in extra effort to distance themselves from the business, close accounts, and avoid customers with potential connections to the industry.

This move by banks is a direct impact of the SEC’s crackdown on the larger players in the industry or reducing their scope of influence. This crackdown has caused panic among bankers, who are unwilling to have any links with customers targeted by the SEC. The concern is that if banks have connections with cryptocurrency companies that are being targeted by regulators, they could face regulatory scrutiny themselves. Therefore, they are choosing to remain on the safe side by limiting their exposure to the market.

In conclusion, the cryptocurrency industry’s future seems to be uncertain as more banks are moving away from it. Cryptocurrency companies are becoming more reliant on banks to pay their employees, and customers are finding it increasingly difficult to deposit or transfer money into digital currency. Banks are trying to avoid any potential regulatory scrutiny that may arise from their relationship with cryptocurrency companies. The SEC’s crackdown on the larger players has caused panic among bankers, and they are unwilling to have links with customers that are targeted by the regulatory authorities.

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