According to a recent report, the sudden collapse of three US lenders has sent shockwaves through the crypto industry, leaving many firms scrambling to find alternatives for their banking needs. Among them is Hong Kong-based crypto hedge fund, MaiCapital, which had cash at one of the fallen institutions, Signature Bank.

Managing partner Marco Lim is now racing to open new bank accounts in Hong Kong, but with the two biggest crypto-friendly banks gone, he is pressing lenders to speed up the account opening process.

Industry in Peril

The loss of Signature Bank and Silvergate Capital Corp. is particularly problematic for the digital asset sector, as both banks operated real-time, seven-days-a-week payment networks for the crypto industry. As a result, many crypto firms are now seeking banks outside the US, with lenders in Switzerland and the United Arab Emirates being among the most popular.

“The US isn’t as accommodative as it was toward crypto. It makes sense to diversify across jurisdictional grounds,” the report cited Richard Galvin, co-founder at fund manager Digital Asset Capital Management in Sydney. “We are going through an onboarding process with a Swiss bank, which is among the lenders we are considering.”

Swiss banks, including Sygnum Bank AG and SEBA Bank AG, have established themselves as key players in the crypto banking space, while Deltec Bank & Trust Ltd. and Capital Union Bank in the Bahamas are also known for their crypto focus.

But, the report adds that one of the obstacles confronting crypto firms is banks’ growing skepticism about the industry in the aftermath of a $2 trillion meltdown, a string of digital-asset blowups, and more regulatory scrutiny. “There are banking services available, but the bar to entry has never been this high,” said Jonny Caldwell, co-head of asset management at Trovio.

As a result, numerous crypto funds seek alternative banking partners among Middle Eastern and Switzerland institutions. For instance, Dubai’s pro-crypto laws have made the city a desirable place to invest capital, whilst Hong Kong’s and Europe’s regulatory efforts and friendlier governments have made those regions more attractive as well.