Cryptocurrency firms eye Swiss lenders after Silvergate, Signature Bank failed

Cryptocurrency companies are scrambling to find institutions to do business with after the collapse of Signature Bank and Silvergate Capital, two lenders that were friends with crypto companies.

Some of these companies have turned to crypto-friendly Swiss banks, flooding them with requests for banking services, according to several 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 instead had to turn to specialized banks.

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

“We’ve had a lot of requests,” said a consultant at a private Swiss bank, who preferred to remain anonymous because of the sensitive nature of the matter.

After Silvergate and Signature Bank wound up this month, the consultant said Monday, the private lender had more applications in a single day than ever before.

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

Dominique Castelli, chief marketing officer at Sygnum, one of the largest Swiss banks focused on servicing digital asset firms, said he was seeing an influx of inquiries.

“Over the past weeks with the development of current banking industry events, we have seen a significant increase in enrollment inquiries from various international locations,” said Castelli, adding that Sygnum’s location in both Switzerland and Singapore is attracting companies.

Sygnum holds a Swiss banking license and a capital markets services license in Singapore, which brings it under the supervision of regulators.

One Swiss-based advisor to fintech firms, who also preferred to remain anonymous due to the sensitivity of the situation, said this was “much more of an influx of US clients” into Swiss banks.

Meanwhile, an executive at a European trading firm said their company was seeing “entities outside Europe” making inquiries about new banking relationships. These companies include crypto-focused hedge funds and venture capital firms, said the CEO, who wished to remain anonymous due to the sensitive nature of the topic.

Interest “is coming mainly from investors, asset managers and blockchain projects looking to diversify their crypto investments with a trusted Swiss partner such as Sygnum Bank,” Castelli said.

The other major lender in Switzerland that deals with the digital asset industry — SEBA Bank — did not respond to a request for comment when contacted by CNBC.

Part of the reason why companies are looking for Swiss banks is because of country regulations that welcome cryptocurrency businesses that need a stable operating environment.

The country has created what locals call a “crypto valley” in the Zug region, just outside the Swiss capital of Zurich, where startups and more established cryptocurrency firms have set up shop.

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

Switzerland is “more stable” and there is “more certainty about the rules,” said Thierry Aris-Ruiz, CEO of Switzerland-based AgAu.io.

The anonymous consultant at the Swiss private bank said that the companies are coming to Switzerland to be in a “safer jurisdiction” to regulate cryptocurrencies.