Crypto Companies to Cut Ties With Silvergate

Published on:

Last Updated on March 3, 2023 by Bitfinsider

Some of the most prominent names in cryptocurrency have withdrawn their support for Silvergate Capital after the leading digital currency player cautioned it must evaluate its ability to live.

Coinbase, Paxos Trust, Circle Internet Financial, and Galaxy Digital Holdings all announced on Thursday that they will halt banking with Silvergate, as did Gemini, which is owned by the Winklevoss brothers.

Bloomberg reported that and Cboe’s digital subsidiary are also leaving the exchange.

The departure of crypto exchanges, stablecoin issuers, and trading offices occurred after Silvergate raised questions about its business viability.

It said it is postponing the submission of its yearly report to regulators because it needs more time to assess how severely its finances have been impacted by the events roiling the cryptocurrency industry.

“The company is assessing the effect of these later events on its capacity to continue as a going concern during the twelve months following the release of its financial statements,” the California-based business said in a filing with the SEC on Wednesday.

Thursday’s closing price for Silvergate shares was 58% lower, and premarket dealing Friday was 5.24% lower at $5.42. More than a dozen of its crypto firm clients have ceased operations, been penalized, or been the subject of an inquiry over the past 12 months, causing the company’s shares to drop by nearly 95%.

Silvergate was formerly the go-to bank for the largest names in crypto, running a vital payments network used for real-time transactions between the companies.

However, the lender has failed in recent months due to its links to troubled crypto players, and it is believed to have suffered as the value of digital assets plummeted in 2018.

It has been affected by the repercussions from the collapse of FTX, which was one of the lender’s largest customers. Customers withdrew $8 billion in assets following the failure of the crypto exchange in November of last year.

In addition, it had ties with bankrupt crypto companies Celsius and BlockFi, as well as digital asset brokerage Voyager Digital. It has also collaborated with the US branch of the cryptocurrency exchange Binance, which is allegedly under criminal investigation for money laundering and sanctions breaches.

Hardware wallets are safe and secure devices that can be used offline. They keep your cryptocurrency offline, making it impossible for you to be hacked. To find out more on the leading hardware wallets, you may view our reviews here: Ledger & Trezor
Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.