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March 3 (Reuters) – Silvergate Capital Corp (SI.N) said on Friday it had made a “risk-based decision” to halt Silvergate Exchange Network, its crypto-payments network, two days after the investment-focused bank digital assets has raised doubts about its viability.
“Effective today, Silvergate Bank has made a risk-based decision to discontinue the Silvergate Exchange Network (SEN). All other deposit-related services remain operational,” Silvergate said in a statement posted on its website.
The Silvergate Exchange Network, one of the bank’s most popular offerings, enabled round-the-clock transfers between investors and crypto exchanges, unlike traditional bank transfers, which can often take days to clear.
Silvergate shares fell more than 2% in after-hours trading on Friday, after closing up 0.9% at $5.77 in regular trading. Shares had fallen to a record low on Thursday, ending the day down more than 97% from their November 2021 record high.
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Silvergate warned in a filing on Wednesday that it was assessing its ability to operate as a going concern, revealing that it had sold additional debt securities this year at a loss and that further losses would mean the bank could be less that well capitalized.
After the warning, cryptocurrency heavyweights including Coinbase Global Inc and Galaxy Digital dropped Silvergate as a banking partner. Stablecoin issuers Paxos and Circle, digital asset exchange Cboes, and crypto exchanges Bitstamp and Gemini have also suspended their partnerships with Silvergate.
Reporting by Akriti Sharma in Bengaluru; Editing by Leslie Adler
Our standards: The Thomson Reuters Trust Principles.
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