US Regulators Shut Down Republic First Bank, Sparking Crypto Community’s Reaction

United States regulators have shut down Philadelphia-based Republic First Bank, marking the first banking failure of 2024 in the crypto world.

The news has ignited discussion within the crypto community as Bitcoin, Ether, and several altcoins experienced slight declines following the announcement.

“Yet another bank collapse, this time Republic First Bank. I’ll stick with Bitcoin,” remarked Zesh Marius Martocsan, CEO, in an April 26 post on X.

“Republic First Bank’s failure is significant, as bank failures provide a strong narrative for crypto,” noted pseudonymous crypto trader Pillage Capital in an April 26 post on X.

“How many more banks must fail before people consider becoming their bank?” questioned crypto commentator Randi Hipper to her 87,100 X followers on April 26.

Following the seizure of Republic First by the Pennsylvania Department of Banking and Securities on April 26, the Federal Deposit Insurance Corporation (FDIC) was appointed as its receiver. According to an April 26 statement published by the FDIC, the agency will assume nearly all deposits and acquire all assets of Republic Bank.

As of Jan 31, Republic First had approximately $6 billion in total assets and $4 billion in total deposits.

Additionally, all 32 of the bank’s branches in New Jersey, Pennsylvania, and New York will be reopened under the Fulton Bank brand by the beginning of next week at the latest.

In 2023, even murmurs of potential banking collapses led to minor upticks in Bitcoin’s price shortly after, but its value has since slightly decreased following the news.

Crypto Markets Dip, Banking Woes

According to CoinMarketCap data, Bitcoin has dipped by 1.16% in the last hour, trading at $62,715, while Ether is down by 0.58% at $3,095.

Bitcoin has traded below a key support level of $65,000 in the past 24 hours. Source: CoinMarketCap

Altcoins have dropped a bit more during this time. Dogecoin is down by 2.88%, and Solana has fallen by 1.79%.

This news comes after a tough year for banks, as FDIC data shows five banking failures in the U.S. in 2023.

JPMorgan acquired First Republic Bank in May 2023 after trying to fix it didn’t work out. It’s a different bank from Republic First so that you know.

In Mar 2023, the Federal Reserve shut down Signature Bank, saying it was to protect the U.S. economy, citing “systemic risk.”

Days later, authorities ordered Silicon Valley Bank to shut down. A week earlier, Silvergate Bank, known for its crypto-friendly services, announced it would close and go into voluntary liquidation.

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The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.

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