Crypto Weekly: Signature Bank signs off
STORY: From another crypto bank going under, to a plea for more time from Sam Bankman-Fried, these are the week’s big stories in the world of virtual money….
Another crypto-friendly bank is no more.
U.S. regulators stepped in to shut down Signature Bank on Sunday.
As of September, almost a quarter of its deposits came from the crypto sector, though the bank had been trying to shrink that figure.
Now its collapse follows that of rival crypto-lender Silvergate and adds to the turmoil over the meltdown at Silicon Valley Bank.
Cornell University professor Saule Omarova says the failures raise big questions:
“What next and what kind of lesson will the banking industry, the venture capital, private equity industry, the tech industry, the crypto industry, and the rest of us will draw from what happened? The one lesson that is clear from here is that what 'systemic risk' means is not necessarily predictable upfront.”
Bitcoin hasn’t suffered amid the turmoil.
By Tuesday it was around $26,000 dollars, touching levels not seen since June.
Traders say the token benefited after U.S. watchdogs moved to limit any fallout from Signature and SVB.
Bitcoin also got a boost from signs that U.S. inflation might be cooling off, and hopes that the Fed could go easy on rate hikes due to the bank dramas.
And Sam Bankman-Fried’s lawyers say his trial should be put back.
They argue the scheduled October date is too soon, with Federal prosecutors yet to turn over some key evidence.
In January, Bankman-Fried pleaded not guilty to eight charges of cheating investors in his crypto exchange.
More charges have since been added.