4 ms·

Yes. Not a banking crisis, but a crypto crackdown. And the timeline of enforcement actions could have easily been planned since 2019 too.

JumpCrisscross 4y ago
> a crypto crackdown And in your mind it’s reasonable that someone tanked Silvergate and Signature to send this message? And their investors and lenders are just cool with that?
- chatmasta 4y ago
  What does the tanking of Signature have to do with the headline of the article, which is the FDIC arbitrarily telling "crypto clients" to close their accounts? This is the FDIC selectively targeting a specific group of depositors for no clear reason, other than - perhaps - that they pose a threat to the future hegemony of a government-backed digital currency, which just so happens to be launching (in its early form of a central government payments facility) four months from now.
  - JumpCrisscross 4y ago
    > which is the FDIC arbitrarily telling "crypto clients" to close their accounts The FDIC isn't a bank. Signature was largely bought, but "Flagstar's bid did not include about $4 billion in deposits related to Signature's digital-asset business." The FDIC is telling depositors they couldn't find a buyer for to find a new bank. > they pose a threat to the future hegemony of a government-backed digital currency FedNow is not a CBDC. It's a modern set of payment rails for interbank transfers.
    - chatmasta 4y ago
      But why are "crypto clients" even classed differently than anyone else? They deposit cash in the bank just like every other client. What makes them fundamentally any different? It's like if the FDIC told all marijuana dispensaries to close their accounts - i.e. totally arbitrary. I would maybe believe the argument that the buyer of the bank didn't want to take on the depositors, if it weren't so convenient for the Fed. As it is, I have trouble believing the FDIC didn't pressure the buyer to make that distinction between depositors as part of the sale process. > FedNow is not a CBDC. No, but it's the clear first step towards one.
      - JumpCrisscross 4y ago
        > why are "crypto clients" even classed differently than anyone else When you bid on a banks assets and liabilities, you get a bunch of spreadsheets. These describe the bank's assets and liabilities, including its depositors. You're allowed to say "not that branch" or "no depositors matching these parameters." > what makes them fundamentally any different They're riskier. Silvergate banked FTX. That was a fraud, and now Silvergate is gone. Signature banked less crypto, but when Silvergate began failing Signature started to slide. Flagstar doesn't want that problem. (I imagine there are also AML/KYC concerns. Signature's crown jewel was its high net worth clientele. That gels with NYCB [1].) Another risky type of depositor are financial institutions. It's not uncommon, in bank takeovers, for deposits from certain types of financial institution (e.g. hedge funds) to be excluded. > it's the clear first step towards one This takes imagination. They're separate tracks. FedNow competes, most directly, with Zelle. It's an always-on modernization of Fedwire, a faster ACH. In any case, the zeal for a CBDC has cooled with crypto's fall and the advent of universal deposit insurance. [1] https://en.wikipedia.org/wiki/New_York_Community_Bank https://en.wikipedia.org/wiki/New_York_Community_Bank
        chatmasta 4y ago
        I don't see how any depositor's assets could be more "risky" than another depositor's - it's straight cash in all cases - unless the bank is doing sketchy shit with their money, like lending it out unsustainably to the point they won't be able to pay their depositors if some of them want their money back... but I guess that's the definition of the fractional reserve banking system, so maybe my real issue is with the fundamental ridiculousness of that. I don't want to sound like that guy in the SVB thread who ended up advocating for Sharia law, and I've got to go to bed, so I'll leave it at that. I would also implore you to consider that closely related (quasi-)government agencies like the Fed, FDIC, SEC and Treasury are all capable of maliciously coordinating with each other in their timing of enforcement actions and agendas. And maybe they're just doing their job of protecting the dollar, but IMO it doesn't make it any less obviously corrupt.
        JumpCrisscross 4y ago
    - TimJRobinson 4y ago
      The FDIC specifically blocked any new buyer from buying the crypto portion of the bank.
      - JumpCrisscross 4y ago
        > FDIC specifically blocked any new buyer from buying the crypto portion of the bank According to whom? (It’s not true.)
- hanniabu 4y ago
  You act like this is a conspiracy but operation choke point is a real thing and the government lost a court case that their tactics were unconstitutional. The goal is to do as much damage to crypto due to the risk against the dollar and prior to the FedNow rollout. If the bank gets hurt in the process then that's cool b/c it teaches other banks not to do business with crypto.
  - JumpCrisscross 4y ago
    > operation choke point is a real thing and the government lost a court case that their tactics were unconstitutional Regulators scrutinizing banks who deal with "high-risk" customers while not defining what risk means ex ante is absolutely a problem. This is not that. It's, first, an entire bank being turned off, not specific accounts. And second, a regional bank with a long-running specialty choosing to buy accounts that gel with that specialty. The fact that a retired ranking Senator is blabbing to the papers versus filing a lawsuit should say enough with respect to his conviction in his claims.
unmole 4y ago
And bailed out Circle for 3 billion in the process?

JumpCrisscross 4y ago

> a crypto crackdown And in your mind it’s reasonable that someone tanked Silvergate and Signature to send this message? And their investors and lenders are just cool with that?

chatmasta 4y ago
What does the tanking of Signature have to do with the headline of the article, which is the FDIC arbitrarily telling "crypto clients" to close their accounts? This is the FDIC selectively targeting a specific group of depositors for no clear reason, other than - perhaps - that they pose a threat to the future hegemony of a government-backed digital currency, which just so happens to be launching (in its early form of a central government payments facility) four months from now.
- JumpCrisscross 4y ago
  > which is the FDIC arbitrarily telling "crypto clients" to close their accounts The FDIC isn't a bank. Signature was largely bought, but "Flagstar's bid did not include about $4 billion in deposits related to Signature's digital-asset business." The FDIC is telling depositors they couldn't find a buyer for to find a new bank. > they pose a threat to the future hegemony of a government-backed digital currency FedNow is not a CBDC. It's a modern set of payment rails for interbank transfers.
  - chatmasta 4y ago
    But why are "crypto clients" even classed differently than anyone else? They deposit cash in the bank just like every other client. What makes them fundamentally any different? It's like if the FDIC told all marijuana dispensaries to close their accounts - i.e. totally arbitrary. I would maybe believe the argument that the buyer of the bank didn't want to take on the depositors, if it weren't so convenient for the Fed. As it is, I have trouble believing the FDIC didn't pressure the buyer to make that distinction between depositors as part of the sale process. > FedNow is not a CBDC. No, but it's the clear first step towards one.
    - JumpCrisscross 4y ago
      > why are "crypto clients" even classed differently than anyone else When you bid on a banks assets and liabilities, you get a bunch of spreadsheets. These describe the bank's assets and liabilities, including its depositors. You're allowed to say "not that branch" or "no depositors matching these parameters." > what makes them fundamentally any different They're riskier. Silvergate banked FTX. That was a fraud, and now Silvergate is gone. Signature banked less crypto, but when Silvergate began failing Signature started to slide. Flagstar doesn't want that problem. (I imagine there are also AML/KYC concerns. Signature's crown jewel was its high net worth clientele. That gels with NYCB [1].) Another risky type of depositor are financial institutions. It's not uncommon, in bank takeovers, for deposits from certain types of financial institution (e.g. hedge funds) to be excluded. > it's the clear first step towards one This takes imagination. They're separate tracks. FedNow competes, most directly, with Zelle. It's an always-on modernization of Fedwire, a faster ACH. In any case, the zeal for a CBDC has cooled with crypto's fall and the advent of universal deposit insurance. [1] https://en.wikipedia.org/wiki/New_York_Community_Bank https://en.wikipedia.org/wiki/New_York_Community_Bank
      - chatmasta 4y ago
        I don't see how any depositor's assets could be more "risky" than another depositor's - it's straight cash in all cases - unless the bank is doing sketchy shit with their money, like lending it out unsustainably to the point they won't be able to pay their depositors if some of them want their money back... but I guess that's the definition of the fractional reserve banking system, so maybe my real issue is with the fundamental ridiculousness of that. I don't want to sound like that guy in the SVB thread who ended up advocating for Sharia law, and I've got to go to bed, so I'll leave it at that. I would also implore you to consider that closely related (quasi-)government agencies like the Fed, FDIC, SEC and Treasury are all capable of maliciously coordinating with each other in their timing of enforcement actions and agendas. And maybe they're just doing their job of protecting the dollar, but IMO it doesn't make it any less obviously corrupt.
        JumpCrisscross 4y ago
  - TimJRobinson 4y ago
    The FDIC specifically blocked any new buyer from buying the crypto portion of the bank.
    - JumpCrisscross 4y ago
      > FDIC specifically blocked any new buyer from buying the crypto portion of the bank According to whom? (It’s not true.)
hanniabu 4y ago
You act like this is a conspiracy but operation choke point is a real thing and the government lost a court case that their tactics were unconstitutional. The goal is to do as much damage to crypto due to the risk against the dollar and prior to the FedNow rollout. If the bank gets hurt in the process then that's cool b/c it teaches other banks not to do business with crypto.
- JumpCrisscross 4y ago
  > operation choke point is a real thing and the government lost a court case that their tactics were unconstitutional Regulators scrutinizing banks who deal with "high-risk" customers while not defining what risk means ex ante is absolutely a problem. This is not that. It's, first, an entire bank being turned off, not specific accounts. And second, a regional bank with a long-running specialty choosing to buy accounts that gel with that specialty. The fact that a retired ranking Senator is blabbing to the papers versus filing a lawsuit should say enough with respect to his conviction in his claims.

unmole 4y ago

And bailed out Circle for 3 billion in the process?