The CEO of Gemini says things would’ve been handled differently if First Republic was a “crypto” bank.
Cameron Winklevoss, the co-founder, and CEO of New York-headquartered crypto exchange Gemini, has accused U.S. regulators of perpetrating double standards in handling the First Republic Bank crisis.
According to Winkelvoss, if First Republic had been a “crypto bank” it would have been “assassinated weeks ago.”
It is important to note that First Republic initially began experiencing “structural challenges” with its balance sheet at the time that Silicon Valley Investment Bank and Silvergate Bank were being closed down by federal regulators or winding down operations.
Winklevoss’s claims align with a series of recent letters penned by three Republican members of the United States House of Representatives Financial Services Committee in an attempt to seek further information on possible coordinated efforts taken against crypto companies operating on U.S. soil.
According to a report from CNBC on April 26, the advisors to First Republic will now seek to coax larger U.S. banking institutions — which have already sent the embattled firm more than $30 billion — into providing more financial aid due to the government refusing to take the bank into receivership.
Both Silvergate and Silicon Valley Bank were taken into government receivership on March 8 and March 10 respectively.
Advisors at First Republic reportedly said that the current private market solution to the firm’s liquidity problems would see the bank remain in operation. However, government receivership is being referred to as the “closed-bank” scenario.
Charles Gasparino, Senior Correspondent at Fox News informed his 160,000 Twitter followers on April 26 that the “private bailout” is being pushed by the U.S. Treasury Secretary Janet Yellen who doesn’t want to bail out depositors with government funds as they did with Silvergate and Silicon Valley Bank.
Things came to a head for First Republic on Monday, April 23, when the beleaguered firm reported in its Q1 earnings call that total deposits had plummeted by more than $100 billion. The firm stated that it would be “pursuing strategic options” to strengthen its financial standing as quickly as possible.
Since Monday, shares in First Republic Bank have collapsed more than 64%, falling from $16.14 to just $5.68 at the time of writing.
The downfall of First Republic Bank is believed to be providing a tailwind for investment into Bitcoin and other cryptocurrencies, as investors grow increasingly distrustful of centralized banking institutions.