© Reuters. FILE PHOTO: A representation of bitcoin is seen in an illustrative image taken June 23, 2017. REUTERS/Benoit Tessier/File Photo
By Hannah Lang and Akriti Sharma
(Reuters) – Silvergate Capital (NYSE:) Corp said on Friday it had made a “risk-based decision” to discontinue the Silvergate Exchange Network, its crypto payments network, two days after the digital asset-focused bank raised questions about its viability.
“Effective immediately, Silvergate Bank has made a risk-based decision to discontinue the Silvergate Exchange Network (SEN). All other deposit-related services remain operational,” Silvergate said in a statement posted on its website.
The Silvergate Exchange Network, one of the bank’s most popular offerings, allowed round-the-clock transfers between investors and crypto exchanges, unlike traditional bank transfers, which can often take days to clear.
Shares of Silvergate tumbled more than 2% in after-hours trading on Friday, after closing up 0.9% at $5.77 in regular trading. Shares on Thursday had fallen to a record low, ending the day down more than 97% from their all-time high in November 2021.
Silvergate warned in a filing on Wednesday that it was evaluating its ability to operate as a going concern, disclosing that it had sold additional debt securities this year at a loss and that additional losses mean the bank could be “less than well capitalized.”
Following the warning, cryptocurrency heavyweights including Coinbase (NASDAQ:) Global Inc and Galaxy Digital removed Silvergate as their banking partner. Stablecoin issuers Paxos and Circle, digital asset exchange Cboe, and cryptocurrency exchanges Bitstamp and Gemini have also suspended their partnerships with Silvergate.
