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Customers Bank has de-banked some crypto hedge funds in recent weeks, three people confirmed. One person stated that this step was largely a clean-up, shutting down inactive accounts. In an effort to limit its exposure to digital assets, the bank capped deposits from crypto customers at 15% of total deposits.
Customers Bank is known as a financial institution that serves leading names in the crypto world such as Galaxy Digital (GLXY), Coinbase (COIN) and Circle. It was learned that the bank informed some hedge fund customers that it could no longer provide banking services. While the extent of the cleanup is unclear, one source said “many funds” were affected. Another source stated that this step is the closure of inactive accounts rather than the widespread debanking of the crypto industry. A third person said the digital asset financial services firm has been in talks with many funds looking for new providers in recent weeks, which may be due to the closure of accounts at Customers Bank.
This latest development once again highlights the difficulties some crypto companies are experiencing in accessing the US dollar banking system following the collapse of Silvergate Bank and Signature Bank last year.
The company, based in West Reading, Pennsylvania, is owned by Customers Bancorp (CUBI) and deals exclusively in U.S. dollars. It does not accept cryptocurrencies or provide loans to support crypto activities. It offers its customers Customer Bank Instant Token (CBIT), a real-time blockchain-based payment platform that enables crypto customers to make USD payments 24/7.
A spokesperson for Customers Bank declined to comment on its policies, stating that the bank is selective about which customers it accepts. In order to limit its exposure to crypto, the bank has capped deposits in CBIT. “We have previously made public our 15% deposit limit in the CBIT vertical,” the spokesperson said. “As a result of this policy limitation, we are naturally selective in new business. We conduct thorough due diligence on every industry we serve and strive to accept only high-quality clients. The digital asset industry is no exception.”
Total deposits at the end of the first quarter were reported at approximately $18 billion, with CBIT contributing approximately $2 billion.
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