According to three individuals familiar with the matter, Customers Bank has recently de-banked several cryptocurrency hedge funds. This move by the bank is part of its efforts to limit its exposure to digital assets. One of the individuals stated that this was primarily done as a housekeeping measure and to remove inactive accounts.

Customers Bank, like other financial institutions, has been cautiously navigating the explosive growth of cryptocurrencies in recent years. Despite the fact that many of its clients are involved in the buying and selling of digital assets, the bank has decided to impose limits on its exposure to the sector in various ways.

As a result, the bank has imposed deposit caps on cryptocurrency clients in order to keep their deposits at or below 15% of total deposits. This is an attempt to reduce the bank's overall exposure to the high-risk sector of digital assets.

Customers Bank's decision to de-bank some cryptocurrency hedge funds may result in a ripple effect, as such funds might now search for more crypto-friendly institutions. However, in recent years, de-banking has been a common occurrence for the cryptocurrency sector, as traditional banks remain careful and conservative about exposure to the crypto market.

Nevertheless, for an emerging market like cryptocurrency, de-banking may be perceived as a risk. It is key to reiterate that the risks of market valuation losses, customer defaults, and general operational inefficiencies have been just some of the bank's concerns with respect to investing heavily in digital assets, hence the need for caution.

Therefore, as the cryptocurrency market continues to grow and mature, banks will likely continue to implement various measures such as deposit caps to reduce their exposure to the Highly volatile crypto space.