– Crypto companies are severing ties with Silvergate, which was once the bank of reference for digital currencies
– This came after the crypto bank flagged doubts about its survival.
– Coinbase, Circle Internet Financial, and other big names abandoned the lender.
Some of the biggest names in the crypto world have backed out from lender Silvergate Capital after prominent digital currency player Silvergate Capital warned it had to assess its survivability.
Coinbase, Paxos Trust, Circle Internet Finance And Galaxy Digital Holdings They all said on Thursday they planned to suspend banking with Silvergate, as did the Winklevoss twins.Gemini.
Crypto.com and Cboe’s digital arm are also moving away, Bloomberg reports.
The migration of crypto exchanges, stablecoin issuers and trading desks comes after Silvergate raised doubts about its future in business.
He said he delayed the submission of his annual report to regulators because he needed more time to examine how badly his finances were affected by the events that shook the crypto world.
“The company is assessing the impact of these subsequent events on its ability to continue as a continuing concern for the twelve months following the release of its financial statements,” the California-based company said in an SEC filing on Wednesday.
Silvergate’s stock price closed down 58% on Thursday and was down 5.24 percent to $5.42 in premarket trading on Friday.Stocks have dropped nearly 95% in the last 12 months as more than a dozen crypto firm clients have been shut down, fined or under investigation.
Silvergate was the bank of choice for the biggest names in crypto, operating a major payment network used for real-time transfers between firms.
But the lender has struggled in recent months thanks to its ties to embattled crypto players and appears to have suffered as the prices of digital assets plunged last year.
He was caught in the fallout from the collapse of FTX, one of the lender’s most important clients, now bankrupt.Its clients withdrew $8 billion in deposits late last year after the crypto exchange crashed in November.
In addition, he had relationships with digital asset brokerage Voyager Digital, as well as other bankrupt crypto firms such as central lenders Celsius and BlockFi.It has also worked with the US arm of crypto exchange Binance, which is reportedly under criminal investigation for money laundering and criminal sanctions violations.
As fears quickly spread that Silvergate’s problems would spread to the crypto industry, companies stepped up to underline their positions.
MicroStrategy said it has no financial relationship with Silvergate other than a loan that it has to repay to Silvergate by 2025.
“For those wondering, credit does not accelerate due to SI bankruptcy or bankruptcy.
Our BTC collateral is not escrowed with SI and we do not have any other financial relationships with SI,” the business intelligence firm said.
tweeted.
Stablecoin Tether is also not exposed to Silvergate, the chief technology officer said in a statement.
chirp Thursday.
Meanwhile, JPMorgan analysts downgraded Silvergate stock from “neutral” to “unweighted” and retracted its $14 price target, CoinDesk reported.He also said that broker Canaccord Genuity downgraded the bank’s rating from “buy” to “hold” and lowered its price target from $25 to $9..
