The recent update conveyed by Silvergate Capital Corp informed the institutional clients of its decision to discontinue the Silvergate Exchange Network(SEN) platform. Halting the SEN platform is set to hinder the capability of institutions to remit money into the crypto exchanges.
Discontinuing SEN Platform
The announcement of SEN closure comes days after the crypto-friendly company warned of struggles to sustain business operations. A post published on the crypto bank website indicated that the closure of SEN would not disrupt other deposit-related operations.
A spokesperson for Silvergate Capital echoed the post in a message sent to companies within the digital assets sector. The message portrayed discontinuing SEN as a risk-based decision to avoid contagion to other services. The spokesperson restated that the crypto bank would update the users as events develop.
Massive Divorce as Instant Settlement Services Discontinued
SEN involves instant settlement services allowing Silvergate’s clients to execute transactions amongst themselves. The platform accommodates transactions regardless of the time the user initiates the transfer. As such, the crypto bank accommodates transactions during weekends or nights.
The compatibility of the SEN platform has attracted increased utilization by leading crypto firms. The firms include Kraken, ErisX, BinanceUS and Gemini, among others. The announcement is a shocker whose enforcement tasked the crypto firms to pursue alternative platforms.
Silvergate’s announcement confirms that the crypto bank is engulfed in a rough period. Its Wednesday statement disclosed an inevitable delay in the firm’s compliance with the Securities and Exchange Commission requirements for Form 10-K. The delay in filing the annual report arose from the inquiry posed by the auditors.
Bumpy Ride for Silvergate Capital
The notice confessed that Silvergate Capital is confronting a series of investigations initiated by the banking regulators and the Department of Justice (DOJ). The crypto-friendly bank admitted its capability to sustain going is doubtful in 2024.
The admission prompted prominent crypto firms, including Kraken, MicroStrategy, Coinbase and Gemini, to distance themselves from the embattled bank. The news would further plunge the stock with a 58% downtrend on Thursday before stabilizing on Friday afternoon.
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