Customers Bank, a financial institution catering to prominent names in the cryptocurrency space such as Galaxy Digital (GLXY), Coinbase (COIN), and Circle, has reportedly informed certain hedge-fund clients that it can no longer provide banking services to them. While the exact scope of this action remains uncertain, sources familiar with the matter suggest that several funds are affected, indicating a significant move within the industry.

Contrary to perceptions of a widespread debanking initiative, insiders clarify that the bank's decision primarily targets inactive accounts rather than constituting a broad debanking maneuver. Nevertheless, this development underscores the ongoing challenges faced by crypto companies in establishing and maintaining relationships with traditional banking institutions, especially in light of the recent collapses of Silvergate Bank and Signature Bank.

Based in West Reading, Pennsylvania, Customers Bank, a subsidiary of Customers Bancorp (CUBI), operates exclusively in U.S. dollars and refrains from directly handling cryptocurrencies or extending loans to support crypto-related activities. Instead, it provides a real-time blockchain-based payments platform named Customer Bank Instant Token (CBIT), facilitating round-the-clock U.S. dollar transactions for its extensive clientele, comprising well over a hundred digital asset firms.

A spokesperson for Customers Bank declined to offer detailed comments on the policy shift, reiterating the bank's selective approach to client onboarding across all industries it serves. To mitigate exposure to the crypto sector, the bank has enforced caps on deposits within the CBIT vertical, where deposits at the end of the first quarter amounted to approximately $2 billion out of a total of $18 billion.

The spokesperson emphasized the bank's commitment to stringent due diligence practices and the pursuit of high-quality clients across all sectors, including the digital assets industry. Despite industry challenges, Customers Bank remains focused on maintaining a robust and discerning client base to uphold its standards of excellence and financial stability.

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