The crypto bros are fast becoming unbankable
Regulators are right to widen the firebreak between the traditional banking system and decentralised finance
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CRYPTO bros are quite literally becoming bankless and unbankable. By abruptly bundling crypto-friendly Signature Bank – one of the last of its kind – into receivership amid an extraordinary weekend operation to backstop the US banking system, regulators are sending a message that volatile tokens and decentralised finance need to be kept far away from traditional finance.
Given echoes of the global financial crisis and with market jitters spreading around the world, that’s no bad thing.
Regulators have been warning for some time of the myriad crypto risks seeping into the mainstream banking system, comparing them directly to the US$1.3 trillion subprime mortgage market that incentivised greed, exploited regulatory arbitrage and eventually led to the 2008 economic meltdown.
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