Cameron Winklevoss, co-founder, and CEO of New York-based cryptocurrency exchange Gemini, has accused US regulators of applying double standards in dealing with the First Republic Bank problem. If First Republic had become a “crypto bank,” it would have been “assassinated weeks ago,” according to Winklevoss.
It is worth noting that the First Republic began encountering “structural challenges” with its balance sheet at the same time that Silicon Valley Investment Bank and Silvergate Bank were being closed down or winding down operations by federal regulators.
Winklevoss’ statements are consistent with a series of recent letters penned by three Republican members of the United States House of Representatives Financial Services Committee seeking additional information on possible concerted activities against crypto businesses operating on US territory.
According to a CNBC report on April 26, First Republic’s advisors will now try to persuade major U.S. banking institutions — which have already handed the beleaguered corporation more than $30 billion — to provide extra financial aid due to the government’s refusal to put the bank into receivership.
On March 8 and 10, Silvergate and Silicon Valley Bank were placed in government receivership, respectively. According to First Republic advisors, the current private market solution to the firm’s liquidity concerns will keep the bank open. Government receivership, on the other hand, is referred to as the “closed-bank” situation.
On April 26, Fox News Senior Correspondent Charles Gasparino informed his 160,000 Twitter followers that the “private bailout” is being pushed by U.S. Treasury Secretary Janet Yellen, who does not want to bail out depositors with government funds as they did with Silvergate and Silicon Valley Bank.
Things came to a head for the First Republic on Monday, April 23, when the bank disclosed in its first-quarter earnings call that total deposits had dropped by more than $100 billion. The company indicated that it would be “pursuing strategic options” to improve its financial position as soon as feasible.
First Republic Bank shares have dropped more than 64% since Monday, plunging from $16.14 to $5.68 at the time of writing. As investors grow increasingly wary of centralized financial institutions, the failure of First Republic Bank is thought to be providing a tailwind for investment in Bitcoin and other cryptocurrencies.
According to the Cointelegraph Price Index, Bitcoin $29,011 was trading for $29,279 at the time of writing, up 7% in the last seven days.