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Marc Rubinstein

These Banks Were Left Holding the Bag in Crypto Implosion

Small regulated lenders saw opportunity. Now they’re part of the cleanup crew. 

Coinbase Cryptocurrency Exchange Website : Illustration
Photographer: Chesnot/Getty Images Europe

Banks go where the money is. So when a market overextends and subsequently collapses, it’s no surprise they’re sometimes left holding the bag.

Crypto is no exception. While major banks stayed away from what Jamie Dimon called a “decentralized Ponzi scheme,” many small lenders saw a profitable niche in helping to service companies operating in the fledgling space. They include Silvergate Capital Corp., Provident Bancorp Inc., Metropolitan Commercial Bank, Signature Bank and Customers Bancorp Inc., among others. The recent collapse of FTX puts their business in the spotlight.