While the use of banks has remained crucial to the flow of funds in the crypto market, a crypto hedge fund managing $400 million is now looking to transition into using Swiss banks following the alerting fallout of ailing U.S. lender SilverGate Capital Corp.
Cutting Ties With Silvergate
Over the past years, digital asset managers have used Silvergate to proceed with the flow of funds to and from crypto exchanges such as Coinbase. However following the latest report indicating the fallout of Silvergate, most crypto platforms including Coinbase, Gemini, and Crypto.com are now looking to cut ties with the U.S. lender i.e, stop the initiation of payments via Silvergate.
In the search for other banks aside from Silvergate so as to proceed with the operation, Richard Galvin, Co-founder at Digital asset management stated that the company is looking to discuss with Swiss banks.
“There are some banks that handle crypto transactions but they are not crypto-focused, unlike Silvergate,” said Galvin. Adding, “It might take some time to find a banking partner. We’re speaking to some Swiss banks.”
Though Galvin did not disclose the name of the banks they are being in discussion with, he mentioned that the concerns over Silvergate have “raised the difficulty level” of moving funds to crypto exchanges and that it might take longer to transfer funds as Silvergate network enabled the fast transaction between accounts, exchanges, and over-the-counter (OTC) trading desks.