FacebookTwitterLinkedInTelegramCopy LinkEmail

Silvergate Bank Faces Backlash from Digital Asset Industry as Financial Woes Worsen

Silvergate Bank Faces Backlash from Digital Asset Industry as Financial Woes Worsen

On Thursday, several companies in the digital asset sector distanced themselves from Silvergate following the bank's announcement that it would delay filing its annual 10-K report with the Securities and Exchange Commission (SEC).

In the filing, the bank disclosed that its financial position might differ from previous reports, as it suffered more losses than originally reported in January.

As a result, Silvergate’s share price plunged 53%, representing a more than 93% drop from its November 2021 high.

In response, cryptocurrency exchanges, including Coinbase, Crypto.com, Bitstmap, Gemini, Circle, and Paxos, announced they would no longer support payments, transfers, or deposits using Silvergate.

In addition, Cboe Clear Digital and Mike Novogratz’s investment company Galaxy Digital have also suspended transactions with the bank. Earlier, Silvergate reported a significant drop in its bank deposits due to the collapse of the cryptocurrency exchange FTX and secured a $4.3 billion loan from the Federal Home Loan Bank to deal with the withdrawals.

READ MORE: Bitcoin: Hundreds of Millions Liquidated as BTC Corrects

Members of Congress have also raised concerns about the bank’s relationship with FTX. The Justice Department is investigating the bank’s involvement in the now-bankrupt exchange. Wall Street investors, including George Soros’s hedge fund, have also bet against Silvergate, making it one of the most shorted stocks in the United States.

Alexander Stefanov

Reporter at CoinsPress

Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.

Learn more about crypto and blockchain technology.