One of the Winklevoss brothers has suggested that the United States authorities may be handling the First Republic Bank (FRC) crisis with some form of bias. The Gemini exchange Co-Founder and Chief Executive Officer (CEO), Cameron Winklevoss took to Twitter to accuse U.S. banking regulators of treating FRC differently because it is not a cryptocurrency bank. If it had been a digital asset service provider, the verdict would have been disastrous.
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
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 it hasn’t been taken into receivership shows just how blatant the double standard is,” Gemini CEO explained.
The woes of First Republic Bank started at the same time when Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank were threatened by liquidity concerns.
Unlike Silvergate Bank which ended up collapsing, First Republic received a deposit of $30 billion from banking heavyweights who were interested in restoring order to the embattled financial institution. And at that time, the embattled firm was able to overcome its structural challenges and liquidity pressure.
However, the bank has begun to undergo some downtrend since the beginning of this week and this has drawn the attention of many stakeholders.
On 24th April, the bank reported that its total deposits had dipped by over $100 billion in its first-quarter earnings reports. Currently, the share price of the bank has sunk by over 65%, and at the time of this writing, it was recorded to be $5.69, a fall from $16.14.
First Republic May Not Consider Government Receivership
Instead of the government receivership which was deployed during the implosion of SVB and Silvergate Bank, the authorities are leaving FRB to seek more credits from investors to salvage the situation.
Noteworthy, the bank plans to remain in operation while it finds a way to settle its liquidity problems, according to the bank’s advisers. Taking the government’s receivership, if offered, will mean that the First Republic will be subjected to the “closed bank” scenario. Therefore, the bank is not looking at exploring the receivership option.
Interestingly, the fall of FRC is fueling a surge in the price of Bitcoin (BTC) which is currently trading at $28,976.68, according to CoinMarketCap.
