important point
- Crypto-friendly bank Silvergate told the SEC that it may not be “well capitalized” and is “re-evaluating its business.”
- Coinbase has responded by suspending payments to and from Silvergate.
- Silvergate’s stock fell 45% on the day.
share this article
Silvergate Bank still struggles with the aftermath of the FTX collapse. The company yesterday admitted to the SEC that it is uncertain about its ability to continue operations.
Silvergate bankruptcy threat
Crypto-friendly banks seem to be on the verge of biting the dust.
US-based major cryptocurrency exchange Coinbase announced Today, we announced that we will no longer accept or initiate payments with Silvergate Bank. The decision came after Silvergate admitted yesterday to the Securities and Exchange Commission that it may not be “adequately capitalized” and that it is “re-evaluating its business.”
Coinbase has revealed that it will continue to have access to all exchange client assets and that it is taking proactive steps to ensure Coinbase customers are not impacted by the changes. We ensured that institutional customers’ cash transactions with other banking partners would continue as usual.
Silvergate is a California-based bank. It operates a real-time payment system called the Silvergate Exchange Network, which allows customers to exchange government-issued currencies for cryptocurrencies.
The bank told the SEC yesterday that it was unable to file its annual financial report on time due to missing information on many items. “The company is currently analyzing certain regulatory and other investigations and investigations pending regarding the company,” the company said. “The company’s independent registered public accounting firm has also requested detailed information on such matters, and the company has responded to such requests.”
Silvergate recently announced that it lost $1.05 billion in the fourth quarter of 2022 due to the “confidence crisis” the crypto industry experienced after the FTX demise.
The company’s stock SI is currently trading at $7.49, down 45% on the day. It reached a record high of about $237 in November 2021.
Disclaimer: At the time of writing, the author of this article owned BTC, ETH, and several other crypto assets.