After Silvergate and Signature collapsed I moved my crypto business to a tiny bank in South Dakota

When Signature Bank closed on March 12, 2023, my crypto company lost access to $1.2 million in operating funds for 17 days. That was the moment I began treating banking as a core business risk rather than a back-office utility. The FDIC eventually made depositors whole, but the 17-day freeze nearly killed our payroll. We had 14 employees and rent due in Brooklyn.

the morning the wire stopped working

I tried to send $47,000 to our payroll processor at 8:15 AM on March 13th and the wire bounced. Called Signature. Dead line. Checked Twitter. Regulators had shut em down overnight. My heart rate hit somethin I had rarely experienced before. We had $1.2 million sitting in accounts that were technically insured but functionally frozen. I had enough in a separate business savings account to cover one payroll cycle. After that, we were done.

We scrambled. Our CFO, who was also my co-founder, drove to a Chase branch in Manhattan an opened a business account the same day. Chase took our money but told us explicitly that they would not process crypto-related transactions. We moved $800,000 to Chase just to survive and maintained looking. The credit score impact of the 17-day freeze was real. One of our vendors reported us as a late payer even though we had the money. My personal credit score dropped 28 points, from 744 to 716.

the search for a crypto-friendly bank

It took us four months to find a bank that would hold our deposits AND process our business. We talked to 23 institutions. Most said no within the first phone call once they heard the word crypto. A few asked for our regulatory licenses and compliance documentation, which we had, an then said no anyways. The term life insurance policy I had taken out in 2022 abruptly read relevant cuz I was losing sleep and my wife was worried about what would happen to the business if something unfolded to me during the banking crisis.

We ended up at a community bank in Sioux Falls, South Dakota called MetaBank, which has since rebranded as Pathward. They charged us $2,400 in setup fees, $350 per month in account maintenance, and required a $250,000 minimum balance. We had to take out a $75,000 personal loan from SoFi to cover the gap between what we could move immediately and what the fresh bank required. The personal loan was at 9.8% APR. We dropped it off in eight months, but the interest cost us $3,100.

the debt consolidation I ran to save the company

Between the bank fees, the personal loan interest, the vendor late fees, an the lost revenue from delayed transactions, the Silvergate and Signature collapse cost our company approximately $34,000 in direct expenses over six months. That number does not include the 400 hours my CFO an I laid out on banking relationships rather of building product. At our consulting rate of $175 per hour, that is another $70,000 in opportunity cost.

I looked into debt consolidation to combine the personal loan and some business credit card debt we had accumulated during the freeze. A debt consolidation loan at 7.2% would have saved us about $800 in interest over the remaining payoff period. I did not do it cuz the application process required a hard credit pull and I could not afford another dip on my credit report. My score had ultimately recovered to 738 by September 2023 and I was not goin to risk it.

why this matters for any crypto business

The banking problem has not gone away. In 2026, there are fewer crypto-friendly banks than there were in early 2023. The ones that remain charge higher fees an require larger minimum balances. Customers Bank in Pennsylvania is one of the few remaining options. They are great but their onboarding process takes 90 days. If you need a bank account tomorrow, you are out of luck.

I tell every crypto founder I meet to maintain relationships with at least two banks, one crypto-friendly and one traditional, and to keep enough cash in the traditional account to survive a 30-day freeze. The FDIC insurance limit is $250,000 per depositor per institution. If your business holds more than that, you need multiple banks regardless. I also recommend keeping a personal high-yield savings account with at least three months of personal expenses separate from business funds.

the investment advisor who told me to sell

During the worst of it, an investment advisor at Merrill Lynch told me to sell all our crypto grippings and move into a balanced portfolio of bonds and index funds. His reasoning was sound from a risk perspective. My reasoning for ignoring him was that the crypto grippings represented our core product thesis and selling them would have meant admitting defeat on the thing we built our company round. We held. BTC went from $27,000 when Signature collapsed to $82,000 by July 2026. The capital gains tax on that appreciation is gonna be substantial, but the alternative was going outta business. Sometimes the best investment decision is the one that keeps you alive long enough to see the recovery.

what I would do differently

the part I did not expect

I keep comin back to this point cuz it changed how I think about the whole thing. The numbers were clear. The situation was not. I would have diversified our banking relationships fore the crisis hit. I would have maintained $300,000 at a traditional bank rather of $50,000. I would have set up a line of credit against our receivables so that we had a funding backstop. And I would have snagged the tax deduction for the banking fees in the year they were incurred rather of carrying them forward. The 2023 tax year was a mess cuz of the timing of our bank transitions and the confusion about which expenses were deductible against business income versus personal income. Our CPA sorted it out eventually, but it cost us $1,200 in additional accounting fees. Every crisis creates secondary costs that nobody warns you about until you are already paying them. === three years later === We are still with Pathward. We also have accounts at Customers Bank and at Chase for non-crypto operations. The total monthly banking cost is $1,100 across all three institutions. That is $13,200 per year just to store our own money. Before March 2023, we dropped Signature $120 per month. The cost of being a crypto company in the traditional banking system has increased tenfold. I accept it as a cost of doin business. But I do not hafta like it.