U.S. regulators may seek to step up action against banks that serve cryptocurrency companies, Morgan Stanley said in an investigative report on March 8. there is
The decision to liquidate crypto-focused bank Silvergate, citing industry trends and regulatory developments, has closed the gates for fiat-to-crypto conversion in the United States, among others. may also be shut down by regulatory action, Morgan Stanley said.
Morgan Stanley also noted that regulators have joined forces to highlight the risks of US banks offering cryptocurrency services. The Federal Reserve (Fed), Federal Deposit Insurance Corporation (FDIC) and Office of the Comptroller of the Currency (OCC) recently issued statements warning banks to consider the liquidity risks associated with crypto assets.
Analysts Sheena Shah and Kinji Steimetz wrote that “flows into the crypto sector will slow down if the ability to bridge between fiat currencies and crypto assets disappears.” ing.
Analysts said Silvergate “has been at the center of the growth of the cryptocurrency industry as a registered bank that provides cryptocurrency services to cryptocurrency exchanges,” and whether the company will be able to continue as a going concern on March 2. The company’s shares are down 58% after it said it was assessing whether it was doing well and was under investigation by regulators, congressional inquiries and the Justice Department.
An important point for the crypto market will be the developments of rival crypto bank Signature Bank, the largest crypto exchange Binance, and further regulatory actions related to certain companies and products. will be, says the report.
Bitcoin (BTC) has broken below the critical $22,200 support level, the report adds. At the time of writing, the world’s largest cryptocurrency was trading around $21,650.
｜Translation: coindesk JAPAN
｜Editing: Toshihiko Inoue
｜Original: Digital Asset Inflows Will Slow Without On-Ramps Between Fiat and Crypto: Morgan Stanley