Independent Banker - November 2023 - 19

commercials, celebrity endorsements
and even the naming rights for a
sports arena. FTX, a cryptocurrency
company that was valued at
$32 billion in January 2022, ran a
Superbowl ad that year featuring
comedian Larry David. Nine months
later, the company filed for Chapter
11 bankruptcy.
" It's certainly not wildfire,
but to say no one's doing it
wouldn't be true either. "
-GREG OHLENDORF,
FIRST COMMUNITY BANK AND TRUST
As of Oct. 16, 2023, CoinGecko
pegged the crypto market cap at
$1.13 trillion.
This drop doesn't mean
cryptocurrency has disappeared
or that questions about it at the
community bank level will recede.
" Some bankers want to act like it's
something that doesn't exist, but we
need to open our eyes to all of these
developments, whether you think
banks are going to be involved with
them or not, " Ohlendorf says.
Regulatory concerns about crypto
When it comes to regulating
cryptocurrency, it's still the " wild
west, " says Brian Laverdure, senior
vice president, digital assets and
innovation policy for ICBA. That
became apparent when multiple
cryptocurrencies failed and customers
were not compensated-just as
gamblers aren't when they make
risky bets.
" A lot of entities that presented
themselves as 'crypto banks' didn't
have the regulations or protections
you would find with your community
bank, " Laverdure says.
To start, crypto assets are not
FDIC-insured, so if a crypto company
goes bankrupt, customers wait in
line with every other debtor. And
while regulation of cryptocurrency
is an ongoing debate in Congress,
most crypto assets " likely qualify
as securities, not commodities, "
Laverdure says. This is why ICBA's
position is that cryptocurrency
should be regulated by the Securities
Crypto investment
performance according
to users:
45%
performed worse
than expected
15%
did better than expected
32%
performed as expected
7%
unsure
What impact has crypto
had on their finances?
60%
neither hurt nor helped
20%
helped their finances
19%
hurt their finances
3%
hurt their finances a lot
Source: Pew Research Center
and Exchange Commission, not
by what could be perceived as
the more lax Commodity Futures
Trading Commission.
Conversations about regulating
cryptocurrency are also ongoing at the
international level.
Customers may also not be aware
of how common theft is in the crypto
world, Laverdure adds. In 2022
alone, hackers stole $3.8 billion
in cryptocurrency, according to
researchers at Chainalysis. That's up
from $3.3 billion in 2021. In October
2022 alone, $775.7 million was stolen
in 32 separate attacks.
Public perception of crypto banks
Cryptocurrency's recent scandals,
bankruptcies and failures have taken
their toll on the public's perception of
it. According to an April 2023 report
from the Pew Research Center, 88%
of Americans have heard at least a
little bit about cryptocurrency. Of
those people, 75% are not confident
that current ways to invest in, trade or
use cryptocurrencies are reliable and
safe. Only 2% said they are extremely
confident in crypto.
Americans 50 years and over are
more skeptical, with 85% who have
heard of crypto saying they're not
confident in its reliability and safety,
compared with 66% of Americans
under 50. Women also tend to be
more skeptical, with 80% reporting
independentbanker.org // 19
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Independent Banker - November 2023

Table of Contents for the Digital Edition of Independent Banker - November 2023
