Crypto firms look to Swiss lenders after Silvergate, Signature Bank failed

Crypto firms are scrambling to find institutions to bank with following the collapse of Signature Bank and Silvergate Capital, two lenders that were friendly to digital currency companies.

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

Generally, the crypto industry has found it difficult to access banking services from traditional lenders, who do not want to touch anything that does not have a clear regulatory framework. This has included blockchain and crypto firms, which have had to turn to specialist banks instead.

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

“We have been inundated with requests,” said an adviser at a private Swiss bank, who preferred to remain anonymous because of the sensitive nature of the matter.

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

“That’s just wrong,” said the counselor.

Dominic Castley, head of marketing at Sygnum, one of Switzerland’s biggest banks focused on serving digital asset companies, said they are seeing a flood of enquiries.

“Over the past few weeks as the current events in the banking industry have unfolded, we have seen a significant increase in onboarding inquiries from various international locations,” Castley said, adding that Sygnum’s location in both Switzerland and Singapore is attractive to companies .

Sygnum has a Swiss banking license and a capital markets services license in Singapore, bringing it under regulators.

A Switzerland-based adviser to financial technology companies, who also preferred to remain anonymous because of the sensitivity of the situation, said there has been “much more inflow from US clients” to Swiss banks.

An executive at a European trading firm, meanwhile, said their company had seen “non-Europe-based entities” requesting new banking relationships. The executive, who spoke on condition of anonymity because of the sensitive nature of the subject, said those firms include crypto-focused hedge funds and venture capital firms.

Castley said the interest “mainly comes from investors, asset managers and blockchain projects that want 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 contacted by CNBC.

Part of the reason companies seek out Swiss banks is the country’s regulation, which is welcoming to cryptocurrency firms that need a stable operating environment.

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

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

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

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