FDIC Takes Over SVB & Signature, Crypto Market Rallies in Response

• The FDIC has taken control of the assets of Silicon Valley Bank and Signature Bank in order to protect depositors.
• Crypto companies are struggling to find banking partners due to high risks associated with the industry.
• The crypto market has been rallying, indicating a preference for decentralized currencies that provide users with the ability to become their own banks.

FDIC Takes Control

The US Treasury, Federal Reserve, and FDIC have released a joint statement announcing that the FDIC has taken control of both Silicon Valley Bank and Signature Bank’s assets in order to protect depositors. All customers who had deposits in these banks will have access to their money as of March 13th.

Equity & Bondholders Wiped Out

The regulators have assured that depositors won’t bear any losses associated with the resolution of Silicon Valley Bank or Signature Bank; however, equity and bondholders are being wiped out as they had knowingly taken risks and lost their money when the risk didn’t pay off. Additionally, management will be fired if the bank is taken over by the FDIC in order to hold those responsible accountable.

Crypto Companies Struggle

The take over of these banks has left crypto companies struggling to find banking partners as many banks are refusing to bank them due to high risk factors associated with this industry; even startups not financial services-oriented are tagged as high-risk and have limited access to banking system. This is causing crypto exchanges such as Okcoin pause USD deposits due regulatory intervention in its primary partner for customer transactions in dollars.

Crypto Market Rallies

As a response Bitcoin is up almost 18% in 24 hours while Ethereum also rallied, signaling from the market that decentralized currencies allowing users become their own bankers are valued amidst recent developments. Investors now seek a decentralized alternative as US onramps remain bottlenecked which results increasing demand for such currencies.

Conclusion

In conclusion, FDIC taking control over two major banks’ assets pose challenges for crypto companies looking for banking partners yet cryptomarket rallies show preference towards decentralized currencies giving users becoming their own banker option therefore investors search for similar alternatives amid US onramps bottle necking situation which contribute increasing demand on such currencies..