Levelfield Financial To Become First FDIC-Insured Bank To Offer Crypto Services• February 3, 2023 1:44 pm • Comments
As of right now, there are strict financial regulations that are restricting what traditional banks can be involved with when it comes to the crypto industry.
Despite this, it looks like Levelfield Financial is now on track to become the first FDIC-insured bank that will be able to offer digital asset services.
This is because LevelField Financial was already a firm that offered crypto services, but their acquisition of Burling Bank finally makes it an official financial entity that handles assets like Bitcoin.
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The acquisition of Burling Bank amounts to a $50 million deal and the bank will soon be able to allow clients to buy BTC and even get paid in BTC.
If a small bank like this is able to make progress in the crypto industry, perhaps it shows that there is a chance of the larger national banks getting involved in the future as well.
However, many still see a lot of regulatory roadblocks that would prevent that in the short term.
Banking startup @LevelfieldEx is looking to become the first FDIC-insured bank to offer crypto services following its acquisition of community bank Burling Bank.
— CoinDesk (@CoinDesk) February 1, 2023
Chicago-based Burling Bank currently provides traditional financial services to customers along with professional trading services.
Their acquisition is part of LevelField Financial’s bid to expand nationwide, with the senior management team of Burling to join the leadership of LevelField.
“We conducted a broad review of banks in the U.S. to find the ideal institution with both an existing business and a management team who are aligned with our vision; we exceeded our expectations with Burling Bank.
With this acquisition, LevelField will become a traditional bank, albeit one serving customers interested in the digital asset class,” said Gene A. Grant II, CEO of LevelField Financial.
The firm will continue to offer retail banking and traditional services alongside products that appeal to customers interested in digital assets.
The bank will still be offering traditional financial services that are typical of all regular banks, but this indicates that it is possible to provide crypto services along side traditional banking services.
Additionally, FDIC insurance typically means that the FDIC will insure each bank account up to $250,000 in case of a bank failure.
That insurance does not cover crypto assets though as it only includes fiat currencies that are held in the account.
With that being said, this should not be a major concern for most investors who are holding digital assets as the safest way to store digital assets is through self custody by using a private wallet that the user owns.
Crypto services that the bank provides are more related to buying BTC or borrowing which many expect to be the main use cases.
Burling Bank sold to Houston crypto exchange LevelField Financial | Crain's Chicago Business https://t.co/fDbnHNteB5
— John Lothian (@JohnLothian) February 2, 2023
Although LevelField may become the first FDIC-insured bank to offer crypto services, that does not mean the bank will necessarily offer a safer way to invest in volatile digital assets.
FDIC insurance protects bank depositors against losses of up to $250,000 in case of a bank failure, but cryptocurrencies are an asset class that remains uninsured by the Federal Deposit Insurance Corporation.
Burling Bank’s senior management team will remain with the bank as part of the acquisition.
The senior team will work in tandem with LevelField’s existing team to expand the bank’s business nationwide.
LevelField’s foray into crypto follows crypto’s growing adoption by traditional finance companies. Bank of America, Goldman Sachs and USAA have embraced cryptocurrencies to varying extents in recent years.
LevelField acquires Chicago-based and FDIC-insured Burling Bank to offer TradFi and Crypto – FinanceFeeds https://t.co/DPk4ZmE3lu
— xrpDave (@DJuwley) February 2, 2023
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