Silvergate Bank Terminates Crypto Payments Network as Stocks Fall to All-Time High – Featured Bitcoin News

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Silvergate Bank has shut down its cryptocurrency payment network. The decision to shut down Silvergate Exchange Network follows the withdrawal of banking relationships by several major cryptocurrency companies, including Coinbase, Gemini, Paxos and Circle.

Silvergate abandons crypto payments network

Silvergate Bank announced on Friday that its cryptocurrency payment network, the Silvergate Exchange Network (SEN), has been shut down. According to a notice posted on the crypto-focused bank’s website:

Effective today, Silvergate Bank has made the risk-based decision to terminate the Silvergate Exchange Network (SEN). All other deposit-related services remain operational.

SEN is Silvergate’s proprietary network that allows the bank’s institutional investors and digital currency clients to transfer US dollars between their Silvergate accounts and the accounts of other Silvergate clients 24 hours a day, seven days a week.

Concerns have grown over Silvergate’s financial stability and future prospects following the collapse of crypto exchange FTX. The bank claimed that as of September 20, 2022, FTX represented less than 10% of its $11.9 billion in total deposits 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 notified the SEC that it was unable to file its annual report with the regulator for the fiscal year ended December 31 “within the prescribed time without unreasonable effort or expense for the reasons described below.” . The crypto-focused bank also revealed that it sold additional debt securities at a loss this year, raising questions about the company’s ability to operate as a going concern. The filing further indicates that the bank’s continued losses could make it “less than well capitalized.” Silvergate added:

The company is currently reassessing its business and strategies in light of the business and regulatory challenges it currently faces.

After Silvergate raised concerns about its business, crypto-focused firms including Coinbase Global, Galaxy Digital, Paxos, Circle, Cboe’s digital asset exchange, Bitstamp, and Gemini suspended their banking partnership with Silvergate.

Shares of Silvergate (NYSE:SI) hit a new all-time low on Thursday, falling more than 97% from their November 2021 high. Last month, Silvergate became the most short-sold stock in the United States. United. The bank suffered a loss of $1 billion in the fourth quarter of last year.

Tags in this story SEN, Silvergate, Silvergate Bank, Silvergate Coinbase, Silvergate Crypto Partnerships, Silvergate Crypto Payments Network, Silvergate Cryptocurrency Payments Network, Silvergate Financial Corp, Silvergate Galaxy Digital, Silvergate SEC, Silvergate Terminates SEN

What do you think of Silvergate shutting down its crypto-payments network? Let us know in the comments section below.

Kevin Helms

An economics student from Austria, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests include Bitcoin security, open source systems, network effects, and the intersection between economics and cryptography.

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