Silvergate Bank Terminates Crypto Payments Network as Shares Plunge to Record Low

Silvergate Bank has discontinued its cryptocurrency payments network. The determination to unopen down Silvergate Exchange Network followed the withdrawal of banking relationships by respective large cryptocurrency firms, including Coinbase, Gemini, Paxos, and Circle.

Silvergate Discontinues Crypto Payments Network

Silvergate Bank announced Friday that its cryptocurrency payments network, the Silvergate Exchange Network (SEN), has been terminated. According to a announcement posted connected the crypto-focused bank’s website:

Effective instantly Silvergate Bank has made a risk-based determination to discontinue the Silvergate Exchange Network (SEN). All different deposit-related services stay operational.

SEN is Silvergate’s proprietary web that allows the bank’s organization capitalist and integer currency clients to transportation U.S. dollars betwixt their Silvergate accounts and the accounts of different Silvergate clients 24 hours a day, 7 days a week.

Concerns mounted implicit Silvergate’s fiscal stableness and aboriginal prospects pursuing the illness of crypto speech FTX. The slope claimed that arsenic of Sept. 20, 2022, FTX represented little than 10% of its $11.9 cardinal full deposits from each integer plus customers. Nonetheless, the slope is reportedly being investigated by the U.S. Department of Justice (DOJ) implicit accounts tied to the disgraced FTX co-founder Sam Bankman-Fried (SBF).

On Wednesday, Silvergate informed the SEC that it is incapable to record its yearly study with the regulator for the fiscal twelvemonth ended Dec. 31 “within the prescribed clip play without unreasonable effort oregon disbursal owed to the reasons described below.” The crypto-focused slope besides revealed that it has sold further indebtedness securities astatine a nonaccomplishment this year, starring to questions astir the company’s quality to run arsenic a going concern. The filing further states that the bank’s continued losses could effect successful it being “less than good capitalized.” Silvergate added:

The institution is presently successful the process of reevaluating its businesses and strategies successful airy of the concern and regulatory challenges it presently faces.

After Silvergate raised concerns astir its business, crypto-focused firms including Coinbase Global, Galaxy Digital, Paxos, Circle, Cboe’s integer plus exchange, Bitstamp, and Gemini suspended their banking concern with Silvergate.

Shares of Silvergate (NYSE: SI) deed a caller all-time debased connected Thursday, plummeting implicit 97% from their highest successful November 2021. Last month, Silvergate became the most shorted stock successful the U.S. The slope incurred a nonaccomplishment of $1 cardinal successful the 4th fourth of past year.

What bash you deliberation astir Silvergate shutting down its crypto payments network? Let america cognize successful the comments conception below.

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