U.S. digital assets platform, LevelField Financial, has announced that it is acquiring Burling Bank, an FDIC-covered chartered bank headquartered in Chicago. Pending regulatory approval, expected later this year, the deal will make LevelField the first full-service bank that offers both fully compliant traditional banking and digital assets services such as trading, custody and De-Fi.
The Federal Deposit Insurance Corporation (FDIC) is an independent body that underwrites deposits held by banking institutions to protect customers in case of bank failure. While the agency covers balances of up to $250,000 in cash deposits, it does not cover cryptocurrencies or other digital assets, meaning that these would still potentially be at risk.
LevelField intends to maintain Burling Bank’s existing core business activities, and the bank’s senior management team will join LevelField’s leadership as part of the acquisition. They will be tasked with continuing to service existing cients, while expanding the bank from being a local community affair to covering the entire United States.
By additionally offering customers LevelField’s digital assets services, currently available in early access, the company will have in place the foundations to achieve its core business aim; to unite traditional banking and digital asset products and services in one trusted platform. LevelField CEO, Gene A Grant II, explained the process of finding a suitable target for acquisition:
“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.”
LevelField is not the first crypto firm to purchase an existing ‘bricks and mortar’ bank to gain traction in traditional financial markets: Sam Bankman-Fried’s Alameda Research took an $11.5 million stake in Farmington State Bank in March 2022, Swiss crypto lender Nexo bought into Wyoming Summit National Bank in September, and Germany’s Bitcoin Group announced a full acquisition of the nation’s Bankhaus von der Heydt, in a deal due to be finalized in Q3 2023.
Also, as we reported last September, the U.S. Federal Reserve has published guidelines which theoretically make it possible for crypto banks to connect to the traditional banking system, without the need for FDIC-insurance or a partner bank to be involved. However, this is a very different prospect than being a full-service chartered bank.
LevelField clearly value the additional level of perceived trust and credibility afforded by being a fully compliant and regulated bank. Will potential customers feel the same way? We shall continue to observe.
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