Trading suspended due to financial concerns
US cryptocurrency exchange Coinbase said on the 2nd that it will suspend remittance transactions with Silvergate Capital Bank. It comes in response to growing concerns about Silvergate’s financial health. Other cryptocurrency companies are following suit.
In light of recent developments and out of caution, Coinbase no longer conducts payment transactions with Silvergate. We will also conduct cash transactions for institutional clients with our other banking partners.
According to a message sent by Coinbase to customers, users of Coinbase Prime, a service that provides trading and custody to institutional investors and companies, will be able to withdraw and deposit fiat currency through Signature Bank silver. there is
A Coinbase spokesperson also commented, “We have minimal exposure to Silvergate.”
What is exposure
The amount, balance, and ratio of financial assets held by investors and institutions that are directly exposed to price fluctuation risk, counterparty risk, etc.
Silvergate said in a filing with the U.S. Securities and Exchange Commission (SEC) on Wednesday that it may be “not well capitalized” and that it is “reviewing its business.” Shares have plunged more than 50% since the announcement.
Silvergate said it was “not able to complete its report for the fiscal year ended December 31 by the March 16 deadline,” and said it expects to record further losses related to the impairment of its securities portfolio. are doing.
He added that the company is currently reviewing its business and strategy in light of operational and regulatory challenges.
In January, Silvergate announced provisional financial indicators for the fourth quarter of 2022 (October to December). The amount of digital assets deposited by customers has dropped sharply from approximately 1.6 trillion yen ($11.9 billion) at the end of September 2022 to approximately 520 billion yen ($3.8 billion) at the end of December, reporting a severe business situation. .
connection: US Silvergate, cryptocurrency-related deposits sharply decreased in 4Q 2022, to reduce employees by 40%
Paxos, Galaxy Digital and more also make statements
Coinbase is not the only cryptocurrency company to stop trading with Silvergate Bank.
Statement from Paxos on Silvergate Bank: Paxos does not have any material exposure to Silvergate. Paxos’ priority has always been the protection of its customers’ funds and assets, and as such we leverage a diverse network of banking partners.
—Paxos (@PaxosGlobal) March 2, 2023
Stablecoin issuer Paxos said it has no material exposure to Silvergate and will stop sending money to and from Silvergate. We will continue to utilize our network with various banking partners.
#Tether does not have any exposure to Silvergate.
— Paolo Ardoino (@paoloardoino) March 2, 2023
Others such as MicroStrategy, Galaxy Digital, Bitstamp and Crypto.com have also taken a similar stance. Paolo Aldoino, chief technology officer of Tether, which issues USDT, also said, “Tether has no exposure to Silvergate.”
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