Hacker News Reader

Comment by cal5k | Hacker News Reader

The revelation that FDIC (allegedly) forced Signature's acquirer to divest of cash holdings from crypto companies is another bit of evidence that anti-crypto regulatory activism is a very real thing.

Which is quite silly because crypto is still small peanuts compared to the bank failures that happened recently.

View on HN

I don't see the "anti-crypto regulatory activism" you are calling out. If FDIC is bailing out a bank and its depositors, that too well beyond its insurance limit, it absolutely has to ensure that the bank is not going to continue to gamble with customer funds.

Heck "no customer deposits going into crypto" should be a hard requirement to be eligible for FDIC insurance.

Is the FDIC going to tell Silicon Valley bank to stop taking deposits from tech companies, or make them stop purchasing long-term treasuries? My guess is no…

FDIC shot Silicon Valley Bank in the head and fired all the executives. It literally does not exist anymore.

Same with Signature. Both banks are being sold off. I was shorthand referring to whoever bought them.

Being a crypto-focused bank carries most of the same risks as being a startup-focused bank (But worse), and in case anyone missed the news the other week, one of those just exploded with what could have been a much bigger hole on its balance sheet had the FDIC waited.

that explosion had very little to do with being exposed to the risk of startups

It had everything to do with it. If SVB diversified its depositor base, it wouldn't have gone bankrupt.

their depositor base could have been anything, it was their purchase of 10yr bonds at large volumes which caused them to collapse, i thought?

You mean the bank failures where good regulations and government intervention mean that depositors aren't out a cent? _Those_ bank failures?

I'm not sure this is quite the example you think it is...

Reply on news.ycombinator.com