LedgerX, the cryptocurrency derivatives exchange and a subsidiary of the collapsed giant FTX, will no longer be a partner of Silvergate Bank.
He urged users to receive electronic transfers through New York-based Signature Bank.
Switch to another partner
According to a Bloomberg coverage, LedgerX differentiated itself from the conflicted crypto-focused financial institution: Silvergate Bank. It advised customers to refrain from using it to receive domestic wire transfers starting March 1.
LedgerX will double down on its existing partnership with Signature Bank, telling customers to use the latter for such services.
Signature Bank said it will reduce its exposure to the cryptocurrency industry by the end of 2022, but will not eliminate it entirely. He ceased making less than $100,000 worth of fiat-to-cryptocurrency transactions for Binance earlier this year.
“While we cannot comment on specific clients, we are still in the business of holding digital asset repositories,” Signature Bank said regarding the collaboration with LedgerX.
LedgerX is one of the few surviving entities under the umbrella of bankrupt giant FTX. It got approval from the US Commodity Futures Trading Commission and was bought by FTX US in October 2021. LedgerX even attempted to register with the CFTC, but withdrew its intentions shortly after the creation of SBF went down. .
The exchange has caught the eye of several industry players who might be interested in acquiring it, including Gemini and Blockchain.com. Initial bids were due to be submitted on January 25, while the final auction is scheduled for March 7.
Silvergate problems
The rocky end of 2022, highlighted by the FTX bankruptcy in November, motivated a massive $1 billion loss for Silvergate Capital (the parent company of Silvergate Bank) in the fourth quarter. It also saw a decline in cryptocurrency customers: from 1,677 on September 30, 2022 to 1,620 at the end of December. Another main factor explaining Silvergate’s problems was its $20 million exposure to BlockFi.
The cryptocurrency-related bank started the year on the wrong foot, Shooting around 40% of its staff and abandoning several projects.
In addition, US Senators Elizabeth Warren, Roger Marshall and John Kennedy suspicious Silvergate of having inside knowledge about the alleged FTX fraud.
“Both Congress and the public need and deserve the information necessary to understand Silvergate’s role in the fraudulent collapse of FTX, particularly given the fact that Silvergate turned to the Federal Home Loan Bank as its lender of last resort in 2022,” they stated. politicians at the time. .
Featured image courtesy of Crain’s New York Business
Binance Free $100 (Exclusive) – Use this link to sign up to receive $100 free and 10% off your first month’s fees for Binance Futures (terms).
PrimeXBT Special Offer – Use this link to sign up and enter the code POTATO50 to receive up to $7,000 on your deposits.
