Key points to remember
- Crypto-friendly bank Silvergate told the SEC it may be “less than well capitalized” and is “reassessing its business.”
- Coinbase halted payments to and from Silvergate in response.
- Silvergate’s stock is down 45% on the day.
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Silvergate Bank is still suffering from the consequences of the collapse of FTX; he admitted to the SEC yesterday that he was unsure of his ability to continue operating.
Silvergate insolvency fears
A crypto-friendly bank looks set to bite the dust.
Coinbase, the first crypto exchange based in the United States announcement today that it would no longer accept or initiate payments to and from Silvergate Bank. The decision came after Silvergate admitted to the Securities and Exchange Commission yesterday that it may be “less than well capitalized” and that it is “reassessing its business”.
Coinbase said all exchange customer assets continue to be accessible and the platform has taken proactive steps to ensure Coinbase customers are not impacted by the change. She assured that the cash transactions of institutional clients with the other banking partners would also continue as usual.
Silvergate is a California-based bank. It operates a real-time payment system called 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 missing information on a number of topics. “The company is currently analyzing certain ongoing regulatory and other inquiries and inquiries relating to the company,” he said. “The Company’s registered independent accounting firm is also requesting detailed information on these matters and the Company is responding to these requests.”
Silvergate recently announced a loss of $1.05 billion in the fourth quarter of 2022 due to the “crisis of confidence” the crypto industry experienced after the collapse of FTX.
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 around $237 in November 2021.
Disclaimer: At the time of writing this article, the author of this article owned BTC, ETH, and several other crypto assets.