Customers Bank, a key financial institution serving prominent cryptocurrency companies like Galaxy Digital, Coinbase, and Circle, has reportedly begun severing ties with certain hedge fund clients. According to sources familiar with the matter, the Pennsylvania-based bank has decided to "offload" several funds, although the exact number remains undisclosed.;

This development comes on the heels of the high-profile collapses of Silvergate Bank and Signature Bank last year, which highlighted the challenges cryptocurrency firms face in securing banking services in the United States. Customers Bank, a subsidiary of Customers Bancorp, only deals with US dollars and does not support cryptocurrencies or crypto lending products. Instead, it offers a blockchain-based payment system called Customer Bank Instant Token (CBIT), enabling round-the-clock USD transactions for over 100 digital asset companies.

A representative from Customers Bank emphasized the bank's selective approach to client selection, citing its risk management strategy. "We have a 15% exposure limit in the CBIT vertical and are very particular about new business, conducting thorough analysis on each industry we serve," the spokesperson explained.

This move occurs against a backdrop of broader financial instability, with the Federal Deposit Insurance Corporation (FDIC) recently flagging potential insolvency risks within the US banking system. The FDIC identified 63 banks at risk and noted $517 billion in unrealized losses. These concerns are compounded by disappointing manufacturing data, which has led to a loosening of US Federal Reserve expectations and boosted the price of Bitcoin and the broader cryptocurrency market.