Crypto Firms Look to Swiss Lenders After Silvergate and Signature Bank Fail

Crypto companies are struggling to find institutions to bank with after the collapse of Signature Bank and Silvergate Capital, two lenders that have been friendly to digital currency companies.

Some of these companies have turned to crypto-friendly Swiss banks, flooding them with requests for banking services, according to multiple industry insiders who spoke to CNBC.

Typically, the crypto industry has found it difficult to access banking services from traditional lenders, who don’t want to touch anything that doesn’t have a clear regulatory framework. This included blockchain and crypto companies, which had to turn to specialist banks instead.

But with two of the biggest lenders, along with SVB, now out of the picture, cryptocurrency companies have turned to Switzerland, which wants to market itself as a crypto hub with solid regulation.

“We have been inundated with requests,” says an adviser to a Swiss private bank, who prefers to remain anonymous due to the sensitive nature of the case.

The adviser said on the Monday following Silvergate and Signature Bank’s liquidation this month that the private lender had more requests in a single day than ever before.

“It’s just crazy,” the consultant said.

Dominic Castley, chief marketing officer at Sygnum, one of Switzerland’s largest banks focused on serving digital asset companies, said it is seeing an influx of inquiries.

“As current events in the banking industry have unfolded in recent weeks, we have seen a significant increase in onboarding requests from several international locations,” said Castley, adding that Sygnum’s location in both Switzerland and Singapore is attractive to businesses .

Sygnum has a Swiss banking license and a capital markets services license in Singapore, placing it under the purview of regulators.

A Swiss-based adviser to financial technology firms, who also preferred to remain anonymous due to the sensitivity of the situation, said there has been “much more inflow of US customers” into Swiss banks.

A director of a European trading firm, meanwhile, said their company had seen “non-European based entities” inquiring about new banking relationships. The director, who wished to remain anonymous due to the sensitive nature of the subject, said these companies include crypto-focused hedge funds and venture capital firms.

Castley said the interest “is mainly coming from investors, asset managers and blockchain projects looking to diversify their crypto investments with a trusted Swiss partner like Sygnum Bank.”

Switzerland’s other major lender involved in the digital asset industry – SEBA Bank – did not respond to a request for comment when reached out by CNBC.

Part of the reason companies seek out Swiss banks is the country’s regulations that welcome cryptocurrency companies in need of a stable working environment.

The country has created what locals call “Crypto Valley” in the Zug region, just outside the Swiss capital of Zurich, where start-ups and more established digital currency firms have set up shop.

In 2021, the government introduced a regulation for companies using so-called “distributed electronic registry technology” or blockchain, which originated with the cryptocurrency bitcoin but has since evolved.

Thierry Arys Ruiz, CEO of Switzerland-based blockchain company AgAu.io, said Switzerland is “more stable” and there is “more certainty about what the rules are”.

The Swiss private bank’s anonymous adviser said companies are coming to Switzerland to be in a “safer jurisdiction” for crypto regulation.