Indirect Banking Emerges as Solution for Crypto Firms Amidst Bank Failures and Regulatory Scrutiny
Crypto companies face challenges in finding banks that are willing to work with them due to regulatory warnings and a series of bank failures, leading to the emergence of intermediary firms. These middlemen store cash on behalf of clients in their own bank accounts or coordinate with banking partners to get accounts in clients’ names. Although indirect banking isn't unique to crypto, its importance has become more pronounced due to the limited number of banks willing to work with digital-asset firms. Intermediaries act as a liaison between banking partners and clients, helping to find firms willing to hold client assets and providing an additional layer of document review to carry out due diligence. With the recent collapse of crypto-friendly banks, many companies want multiple bank accounts to guard against the failure of any one bank or a shift in a nation’s regulation. The article highlights intermediary firms such as FV Bank and BCB Group that cater to crypto companies and take on companies over a period of two to four months, collecting documentation on corporate structure and compliance and submitting it to network banks.