key takeaways
- Crypto-friendly bank Silvergate told the SEC that it may be “less than well capitalized” and was “reassessing its business.”
- Coinbase has stopped payments to and from Silvergate in response.
- Silvergate shares fell 45% on the day.
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Silvergate Bank Still Reeling From FTX Collapse; he admitted to the SEC yesterday that he was not sure of his ability to continue trading.
Silvergate insolvency fears
A crypto-friendly bank appears to be about to bite the dust.
Coinbase, the leading US-based cryptocurrency exchange. Announced today that it would no longer accept or initiate payments to and from Silvergate Bank. The decision came after Silvergate admitted yesterday to the Securities and Exchange Commission that it may be “less than well capitalized” and was “reassessing its business.”
Coinbase stated that all exchange client assets remained accessible and that the platform had taken proactive steps to ensure that Coinbase clients were not impacted by the change. He assured that institutional client cash transactions with other banking partners would also continue as usual.
Silvergate is a California-based bank. It operates a real-time payments system called the Silvergate Exchange Network, which allows customers to exchange government-issued currencies for cryptocurrencies.
The bank told the SEC yesterday that it could not file its annual financial report on time due to lack of information on various issues. “The company is currently reviewing certain pending regulatory and other inquiries and investigations with respect to the company,” he stated. “The company’s independent registered public accounting firm is also requesting detailed information related to such matters and the company is responding to such requests.”
Silvergate recently announced a $1.05 billion loss in Q4 2022 due to the “crisis of confidence” the cryptocurrency industry experienced following the FTX collapse.
Shares of the company, SI, are currently trading at $7.49, down 45% on the day. It had previously reached an all-time high of approximately $237 in November 2021.
Disclaimer: At the time of writing, the author of this article owned BTC, ETH, and various other crypto assets.
