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The crypto-friendly customer bank said to break the bank on some digital asset hedge funds
Customers Bank, which serves some of the biggest names in cryptocurrency including Galaxy Digital (GLXY), Coinbase (COIN) and Circle, has told some hedge fund clients that it can no longer provide them with banking services, according to three people familiar with with the system. question.
While the scale of the collection is unclear, one person said there is “a lot of money” involved. A second person said the action represented the offboarding of inactive accounts rather than widespread industry debanking. A third person said his digital asset financial services firm has spoken to a number of funds looking for new providers in recent weeks, potentially following the offboarding of accounts to clients.
This latest development highlights the difficulty some crypto firms have accessing the US dollar banking system following the collapse of the US banking system. Silvergate Bank AND Signature bank last year.
The West Reading, Pennsylvania-based company, owned by Customers Bancorp (CUBI), trades only in U.S. dollars and does not accept cryptocurrencies or make loans to support crypto businesses. It offers its customers, estimated at over a hundred digital asset companies, a real-time blockchain-based payments platform called Customer Bank Instant Token (CBIT) that allows crypto customers to make payments in US dollars around the clock, 7 days a week.
A Customer Bank spokesperson declined to comment on the policy, saying only that the bank has been choosy about who it takes on as a customer. To limit its exposure to cryptocurrencies, the bank has limited deposits into CBIT, which offers near-instant settlement and charges no fees.
“We have already publicly discussed our 15% limit on deposits in the CBIT vertical,” the spokesperson said. “As a result of this policy limitation, we are understandably selective about new businesses. In each of the industries we serve, we perform extensive due diligence and seek to engage only top-tier clients. The digital assets industry is no exception.”
Total deposits at the end of the first quarter were approximately $18 billion, with CBIT contributing approximately $2 billion.