In recent years, the cryptocurrency industry has experienced significant growth and innovation. However, one major obstacle that continues to hinder its progress is the struggle to find banking partners. Without a reliable banking partner, crypto companies face numerous challenges, including the inability to accept dollar deposits, pay employees and vendors, and conduct essential financial transactions. In this article, we will explore the banking problem faced by crypto startups, the impact it has on the industry, and possible solutions to navigate this challenging landscape.

The Importance of Banking for Crypto Companies

The crypto industry heavily relies on the traditional banking system to operate effectively. Banking partners are essential for crypto companies to facilitate transactions, accept deposits, and provide necessary financial services. Without a banking partner, these companies are limited in their ability to conduct business and may face significant obstacles in their operations.

The Historical Banking Challenge for Crypto Companies

The challenges faced by the crypto industry in securing banking partnerships are not new. In the early days of crypto, mainstream banks were hesitant to work with the sector due to perceived risks and regulatory uncertainties. However, as the industry matured, some banks began to embrace crypto and provide services to crypto companies.

The Rise and Fall of Crypto-Friendly Banks

While some mainstream banks, such as JPMorgan and BNY Mellon, started banking crypto exchanges and allowing clients to store and trade coins, the industry heavily relied on a few specialized banks known for their crypto-friendly services. Silvergate Bank and Signature Bank emerged as key players in the space, offering real-time payments and catering to the specific needs of crypto clients.

However, recent events have shaken the foundation of the crypto banking landscape. In October, Citibank unexpectedly locked trading platform Swan Bitcoin out of its corporate bank account without warning or explanation. This incident highlighted the vulnerability of smaller crypto firms and the potential existential threat they face when banking partnerships are abruptly severed.

The Collapse of Silvergate Bank

The first major blow to the crypto banking landscape came with the collapse of Silvergate Bank. The bank had been struggling since the collapse of FTX and its sister company Alameda Research, both of which were also clients. The failure of FTX prompted customers to withdraw billions of dollars, leading to a liquidity crisis for Silvergate Bank. On March 8, the bank announced its intention to wind down operations, leaving many crypto businesses without a banking partner.

The Downfall of Signature Bank

Shortly after the collapse of Silvergate Bank, another major blow hit the crypto industry with the downfall of Signature Bank. Signature Bank had been a vital financial institution for the industry, providing services to notable crypto companies like Coinbase. However, a run on the bank by depositors caused its collapse. The closure of Signature Bank further exacerbated the banking problem for crypto startups, leaving them scrambling to find alternative banking options.

Regulatory Scrutiny and Coordination

The challenges faced by crypto companies in securing banking partnerships are not solely due to the reluctance of banks. Regulatory agencies, including the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC), have expressed concerns about the risks associated with cryptocurrencies and their potential impact on the stability of the banking system.

In a joint statement on January 3, these agencies acknowledged the significant risks posed by the crypto industry. While they did not prohibit banks from servicing crypto businesses, the statement made it clear that risks related to the crypto-asset sector should not migrate to the banking system.

The coordinated actions and statements by regulators have raised concerns among crypto industry participants. Some believe that regulators are attempting to regulate crypto by stealth, using their influence over the banking sector to create de facto policies without requiring new legislation. This has led to comparisons with "Operation Choke Point," a program under the Obama administration that pressured banks to sever ties with disfavored industries.

Impact on Crypto Companies

The collapse of crypto-friendly banks has had a significant impact on the operations of crypto companies, particularly smaller startups. While larger crypto businesses may still be able to hold onto their existing banking accounts, smaller firms are left unbanked and face numerous challenges.

Without access to banking services, crypto companies struggle to accept deposits, pay employees and vendors, and conduct essential financial transactions. This lack of banking support hinders their ability to grow and operate in a sustainable manner. It also creates barriers to entry for new startups, as they face difficulties in securing funding and establishing reliable financial infrastructure.

Seeking Alternative Banking Options

In the face of the banking problem, crypto startups are left with no choice but to seek alternative banking options. While some larger crypto businesses may be able to establish relationships with banks that are still open to serving the industry, smaller startups face greater challenges.

The Future of Crypto Banking - Nordark

The banking problem for crypto startups highlights the need for increased regulatory clarity and collaboration between the crypto industry and traditional banking sector. To achieve widespread adoption and mainstream usage of cryptocurrencies, the industry must establish strong and reliable banking partnerships.

Nordark strive to provide the cryptocurrency industry with reliable banking.


The banking problem for crypto startups presents significant challenges to the industry's growth and development. Without reliable banking partners, crypto companies face obstacles in conducting essential financial transactions and operating in a sustainable manner. The collapse of crypto-friendly banks like Silvergate Bank and Signature Bank has further exacerbated this problem.

However, there is still hope for the future. By fostering collaboration between the crypto industry, regulators, and traditional banks, it is possible to create a more supportive and regulated banking environment for crypto startups. With increased regulatory clarity and the establishment of strong banking partnerships, the crypto industry can overcome the banking problem and continue to innovate and evolve.