Gemini CEO Cameron Winklevoss criticizes US regulators for inconsistent treatment of First Republic Bank amid its ongoing financial crisis.
Cameron Winklevoss, the chief executive officer and co-founder of the Gemini cryptocurrency exchange, has taken issue with the way US regulators are handling the ongoing First Republic Bank crisis. Winklevoss argued that if First Republic had been a crypto-based bank, authorities would have moved swiftly to close it down. These remarks come as First Republic grapples with balance sheet problems, a situation not unlike those faced by Silvergate Bank and Silicon Valley Investment Bank, which were shut down or winding down their operations due to regulatory intervention.
First Republic Bank is down another 35% and falling fast. If this was a "crypto" bank it would have been assassinated weeks ago. The fact that is hasn't been taken into receivership shows just how blatant the double standard is.
— Cameron Winklevoss (@cameron) April 26, 2023
Winklevoss’s statements resonate with concerns raised in recent letters from three Republican members of the US House of Representatives Financial Services Committee. They inquired about potential coordinated actions targeting crypto businesses operating in the United States.
First Republic Seeks More Financial Aid
An April 26 CNBC report disclosed that First Republic Bank’s advisers are seeking additional financial support from larger US banking institutions. These banks have already contributed more than $30 billion in aid to the beleaguered firm. However, the US government is not considering taking First Republic into receivership, a stark contrast to the handling of Silvergate Bank and Silicon Valley Bank, which entered government receivership on March 8 and March 10, respectively.
First Republic’s advisers believe that addressing the bank’s liquidity issues through private market solutions will allow it to maintain operations. However, government receivership is still considered the “closed-bank” scenario. Charles Gasparino, a Fox News senior correspondent, told his 160,000 Twitter followers on April 26 that Treasury Secretary Janet Yellen supports the private bailout initiative. He claims that the latter opposes using government funds to rescue depositors, unlike the cases of Silvergate and Silicon Valley Bank.
Scoop: Execs at banks involved in the @firstrepublic imbroglio say latest private sector bailout is actually being pushed by @SecYellen & Co who, unless pushed to the brink, dont want to be bailing out ALL depositors as they did w SVB and Signature. Still a heavy lift. Developing
— Charles Gasparino (@CGasparino) April 26, 2023
First Republic Bank’s Financial Struggles Continue
First Republic Bank’s financial woes intensified on April 24 when it revealed in its Q1 earnings call that total deposits had dropped by over $100 billion. The bank stated it would explore strategic alternatives to rapidly improve its financial health. In response to these developments, First Republic Bank’s shares nosedived more than 64%, falling from $16.14 to just $5.68 at the time of writing.
Industry experts believe that the ongoing First Republic Bank crisis may be fueling investments in Bitcoin and other digital currencies, as faith in centralized banking institutions continues to wane. Bitcoin’s price has increased 7% in the past seven days, surpassing $29,000 at the time of writing.
Cameron Winklevoss’s accusations of inconsistent regulatory practices in the First Republic Bank crisis underscore the mounting apprehension within the cryptocurrency sector. As traditional banks like First Republic face financial challenges, the shift toward decentralized finance and digital currencies could gain further traction.