It sounds like the U.S. banking, and financial systems are about as structurally sound as the popsicle stick bridge I made in 9th-grade woodshop. 👎
Never mind the Silvergate and Silicon Valley Bank fiasco; today’s bank of the day is Signature Bank ($SBNY).
New York regulators have stated that the closure of Signature Bank is unrelated to cryptocurrencies, contrary to speculation that its demise was connected to the bank’s involvement in the digital asset industry. Signature Bank was known for its crypto-friendly stance, providing banking services to a wide range of cryptocurrency-related companies. However, recent reports indicate that the bank was already under criminal investigation before its collapse, which now appears to be the primary factor leading to its failure.
According to the reports, Signature Bank was facing accusations of money laundering and other illicit activities, which had put the bank under the scrutiny of law enforcement agencies. This criminal investigation, rather than any direct involvement with cryptocurrencies, seems to be the main reason for the bank’s eventual collapse.
In a separate but related development, macroeconomic strategist Lyn Alden warns that the U.S. banking system is currently nursing over $600 billion worth of unrealized losses. Alden’s analysis suggests that the U.S. financial system may be more fragile than it appears, as these unrealized losses have been building up and can potentially cause significant instability in the banking sector.
Alden emphasizes the importance of closely monitoring the situation, as a failure to address these unrealized losses could lead to serious consequences for the overall health of the U.S. economy. She encourages investors and financial institutions to exercise caution, given the potential risks associated with the current state of the banking system.
Fears regulators and lawmakers might try to fix the issue are growing in the crypto community. Crypto might become a scapegoat for banking’s failures – the equivalent of waking up in the middle of the night to your fire alarm blaring. Instead of investigating why it’s going off, you take the batteries out instead. 🤦♂️