Crypto industry majors ditch struggling lender By Reuters

by Arthur · March 6, 2023

(Reuters) – A number of cryptocurrency heavyweights including Coinbase (NASDAQ:COIN) Global Inc and Galaxy Digital dropped Silvergate Capital (NYSE:SI) Corp as their banking partner after the lender’s latest filing raised questions about its ability to remain in business.

La Jolla, California-based Silvergate, one of the most influential banks in the digital asset industry, also said it has made a “risk-based decision” to wind down the Silvergate Exchange Network that enabled crypto payments.

Shares in the crypto-friendly bank have lost nearly 98% in value from their record close in November 2021.

Here is a list of crypto firms that have issued statements in light of developments in the beleaguered bank:

Okcoin:

The crypto exchange said corporate and client fund exposure to Silvergate was quite limited, adding that all clients’ funds were safe.

Bakkt Holdings Inc:

The digital asset platform said it was closely monitoring the situation with Silvergate and was in the process of discontinuing certain services.

Microstrategy (NASDAQ:MSTR) Inc.:

The crypto firm said it has a loan from Silvergate that does not mature until the first quarter of 2025, adding that the bank’s insolvency or bankruptcy will not accelerate the loan. Acceleration clause requires that a loan be repaid immediately under certain conditions.

Coinbase Global:

The crypto exchange said it no longer accepted or initiated payments to or from Silvergate. The firm also said it has minimal exposure to the crypto-focused bank.

Crypto.com:

A spokesperson for the crypto exchange said in an email to Reuters that it temporarily suspended USD deposits and withdrawals via Silvergate as a precaution.

Gemini:

The crypto firm said on Twitter that it has stopped accepting customer deposits/withdrawal processing via Automated Clearing House (ACH) and wire transfers through Silvergate on the Gemini exchange.

Galaxy Digital:

The company said in a tweet in light of the latest development that it has stopped accepting or initiating transfers to Silvergate, adding that it has no material exposure to the bank.

Bit stamp:

The crypto exchange said that as a precautionary measure in light of recent news, it is no longer processing transfers with Silvergate, adding that client funds remain secure and fully accessible.

Circle:

The firm said it is sensitive to the concerns surrounding Silvergate and is in the process of discontinuing certain services with the bank and notifying customers.

Paxos:

The crypto firm said it has no significant exposure to Silvergate, but added that in light of recent developments with the bank, it has suspended all Silvergate Exchange Network transfers and transfers to its Silvergate account.