Digital Assets: Key Crypto Players Sever Links With Silvergate Capital
Their action followed after Silvergate delayed the filing of its annual report.
On March 2nd, four firms related to cryptocurrency announced that they will no longer be doing business with Silvergate Capital (NYSE: SI). This decision was made after Silvergate revealed in an SEC filing that it was delaying its annual report due to ongoing investigations. (PYMNTS)
The bank said it was examining “certain regulatory and other inquiries and investigations that are pending with respect to the company.”
Coinbase announced on Twitter that it will no longer accept payments to or from Silvergate, but assured its clients that their funds are safe and that it will continue to facilitate cash transactions with other banking partners.
Circle said on Twitter that it is in the process of winding down its services with Silvergate and notifying its customers, but emphasized that it has relationships with multiple banking partners and is operating normally.
Gemini took to Twitter to say that it has stopped accepting customer deposits and processing withdrawals via Silvergate, but stated that it holds all customer funds in U.S.-insured banks or money market funds.
Paxos tweeted that it has discontinued transfers and wires to its Silvergate account but emphasized that it has minimal exposure to the bank and prioritizes protecting its customers’ funds.
The implications of Silvergate’s ongoing investigations are uncertain, but the crypto market has already demonstrated a loss of confidence.
Crypto prices have plunged as investors pressed the sell button fearing Silvergate’s potential bankruptcy and its impact on asset prices.
As this is being written, bitcoin is trading nearly 5% lower at $22,334.
Related Story: As Withdrawals Surge, Crypto Focused Banks Borrow Billions From Home-Loan Banks
Image by WorldSpectrum from Pixabay
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