Crypto industry distances itself from Silvergate as bank collapses

Yahoo News ^ | 3/3/23

[EBH]

Thursday several crypto firms made statements meant to distance themselves from crypto-friendly bank Silvergate, which saw shares free fall on Thursday after the company delayed its annual report and said it would report further losses.

Coinbase, Paxos, Galaxy Digital, Gemini, BitStamp, Crypto.com and Circle each issued statements saying they have cut ties with a once crucial partner linking them to the traditional bank system. MicroStrategy has also addressed concerns for its Silvergate loan in the event the bank faces insolvency.

This distancing from the crypto industry adds another business challenge for Silvergate, which gave notice late Wednesday it won't meet a March 16 extension to file its annual report and cast doubt on its ability to continue as a going concern over the next 12 months.

Shares of the company were down as much as 56% in afternoon trade on Thursday.

Coinbase has de minimis corporate exposure to Silvergate," the company said. Coinbase added that "out of an abundance of caution" it is no longer accepting or initiating payments to or from Silvergate.

New York-based crypto trust and stablecoin issuer Paxos also announced it was cutting ties with Silvergate. Paxos said it had discontinued transfers from its Silvergate account and does not have material exposure to the bank. "We leverage a diverse network of banking partners," Paxos said.

Galaxy Digital, U.K.-headquartered exchange Bitstamp and Crypto.com also said in statements shared with Yahoo Finance that they are halting banking transactions with Silvergate "out of an abundance of caution" and that none of the companies are facing material losses.

"If you do choose to deposit funds into this account, you do so at your own risk," Bitstamp added.

[Pearls Before Swine]

Rats, sinking ship.

As a stock, Silvergate (symbol SI) is 98% off its highs. That’s death spiral action.