By James Davis
Several crypto firms have distanced themselves from crypto-friendly bank Silvegate after it failed to deliver its yearly 10-k report to the SEC (Securities and Exchange Commission).
The notice sent by the bank to the Commission indicated its financial health could be far from what it revealed last month. It is alleged that Silvergate realized more losses during its final quarter last year than those it reported in February.
In the wake of this revelation, Silvergate’s stock price dipped by over 50% on Thursday, and as of this writing, the stock is trading at $6.33. The crypto-friendly bank’s stock is now down 94% from its all-time high of $223, reached in November 2021.
Several Crypto Exchanges Discontinue Fund Transfers Via Silvergate
Crypto exchange Coinbase wrote on its Twitter account that it would no longer initiate or accept payments to or from Silvergate. According to the exchange, the move is meant to ensure the safety of client funds.
Further, Singapore-based exchange Crypto.com also informed its users that the firm would reject money transfers to and from Silvergate. The exchange spokesperson says Deposits and withdrawals via the bank have been paused temporarily.
Bitstamp, a Luxembourg-based crypto exchange, explained in a blog post that it would stop its support for bank transfers via Silvergate. In addition, the exchange advised its users that moving forward, all USD payments would be processed through Signature Bank, Silvergate’s main rival.
Crypto Exchange Gemini, co-founded by the Winklevoss twins, also made its move. The firm announced it would not process deposits or withdrawals via Silvergate.
Issuers of Leading Stablecoins Follow Suit
Meanwhile, USDC issuer Circle took to Twitter to inform the public that it was also planning to cut ties with Silvergate. The company said more information in regard to the matter would follow soon.
Another stablecoin issuer, Paxos, stated that it had halted transfers to its accounts via Silvergate but would continue to process outgoing payments through the bank.
Cboe Clear Digital also revealed it was suspending all transactions with the crypto-friendly bank until further notice. Elsewhere, investment company Galaxy Digital announced halting fund transfers via Silvergate.
It remains to be seen whether other firms will go down the same road in the coming days.