WSJ: Banks are severing ties with the crypto sector under U.S. regulatory crackdown

ChainCatcher news, according to The Wall Street Journal, some banks in the United States are distancing themselves from cryptocurrency companies due to the crackdown by U.S. regulators, which could sever the ties between digital currencies and the real-world financial system. Following the bankruptcy of FTX last year, regulators expressed concerns about the relationships between banks and cryptocurrency clients. The U.S. SEC is actively targeting larger participants in the industry, potentially shrinking their influence.

Insiders say this move has raised alarms among bankers who are reluctant to deal with clients under SEC scrutiny. Now, bankers are reassessing all risk exposures in the crypto space, no matter how small. A few small banks deeply involved in crypto are reducing their exposure to the market or completely severing ties with it. Banks that are keeping their distance from cryptocurrencies are working harder to distance themselves from this business, closing accounts and avoiding clients with potential connections to the industry. Without banking cooperation, cryptocurrency companies find it difficult to pay employee salaries and to allow customers to deposit or transfer money into digital currencies. (source link)