- Crypto-friendly bank Silvergate announced orderly liquidation.
- Several major crypto exchanges distanced themselves from Silvergate.
Crypto firms have always had tenuous access to banking services. The liquidation of a major crypto-friendly bank will likely make these issues even worse.
News from Silvergate rocked the crypto markets, wiping out $1 billion in value. Following the panic, major exchanges scrambled to distance themselves from the potential fallout.
On Thursday, crypto exchanges Binance, Coinbase, OKX, and Paxos claimed they have no assets in Silvergate.
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Binance has no “asset losses” at Silvergate, Binance CEO Changpeng Zhao (CZ) tweeted. “Funds are SAFU.”
“Coinbase has no client or corporate cash at Silvergate. Client funds continue to be safe, accessible & available,” Coinbase tweeted.
“Our corporate and customer funds are safe,” said OKX President Hong Fang. “Team have done a great job of managing risk and minimizing exposure,” he added.
According to Reuters, Binance moved its assets from Silvergate in 2021. The largest global exchange moved some $400 million to a trading firm Merit Peak.
Why Is Silvergate Important?
On Wednesday, Silvergate announced it would wind down its operations, returning all assets to its creditors.
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Silvergate Bank provided banking services to various crypto-related companies. The bank developed a reputation as a crypto-friendly institution, making it popular among crypto startups.
The collapse of Silvergate raises questions about the ability of US banks to serve the digital asset industry.
On the Flipside
- Huobi and Kraken did not issue public statements about Silvergate.
- Silvergate announced it would return all assets to its creditors.
Why You Should Care
Silvergate’s collapse raises questions about the viability of providing banking services for crypto. Aside from major exchanges, crypto startups don’t have easy access to banking services.
Read about Silvergate’s collapse:
Silvergate Crisis: Bitcoin (BTC) Leads Market Plummet as Billions Vanish in Minutes
Read about the SEC’s crackdown on airdrops:
Why Sending ‘Free’ Coins to Vitalik Buterin May Soon Be Illegal
