Silvergate Bank Shuts Down Crypto Payments Network as Stocks Drop to Record Low – Select Bitcoin News
Silvergate Bank has shut down its cryptocurrency payments network. The decision to shut down the Silvergate exchange network followed the withdrawal of banking relationships by several major cryptocurrency firms, including Coinbase, Gemini, Paxos and Circle.
Silvergate shuts down crypto payments network
Silvergate Bank announced on Friday that its cryptocurrency payments network, the Silvergate Exchange Network (SEN), has been shut down. According to a note on the crypto-focused bank’s website:
Effective immediately, Silvergate Bank has made a risk-based decision to discontinue the Silvergate Exchange Network (SEN). All other deposit-related services will remain operational.
SEN is Silvergate’s proprietary network that enables the bank’s digital currency institutional investors and customers to transfer US dollars between their Silvergate accounts and the accounts of other Silvergate customers 24 hours a day, seven days a week.
Concerns about Silvergate’s financial stability and future prospects increased following the collapse of crypto exchange FTX. The bank claimed that as of September 20, 2022, FTX represented less than 10% of its total deposits of $11.9 billion from all digital asset customers. Nonetheless, the bank is reportedly under investigation by the US Department of Justice (DOJ) over accounts linked to disgraced FTX co-founder Sam Bankman-Fried (SBF).
On Wednesday, Silvergate told the SEC that it was unable to file its annual report for the year ended Dec. 31 with the regulator “within the required timeframe without undue effort or expense” for the reasons described below. The crypto-focused bank also announced that it sold more debt at a loss this year, prompting questions about the company’s ability to continue as a going concern. The filing goes on to say that the bank’s ongoing losses could leave it “less than well capitalized.” Silvergate added:
The company is currently in the process of re-evaluating its businesses and strategies in light of the business and regulatory challenges it is currently facing.
After Silvergate raised concerns about its business, crypto-focused companies including Coinbase Global, Galaxy Digital, Paxos, Circle, Cboes Digital Asset Exchange, Bitstamp, and Gemini suspended their banking partnership with Silvergate.
Silvergate (NYSE: SI) shares hit a new all-time low on Thursday, plunging over 97% from their November 2021 peak. Over the past month, Silvergate has become the most heavily discounted stock in the US. The bank suffered a $1 billion loss in the fourth quarter of last year.
What do you think of Silvergate shutting down its crypto payments network? Let us know in the comment section below.
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Source: Crypto News Deutsch