- LedgerX, also announced that it will also switch to using Signature Bank moving ahead.
- Silvergate Bank’s parent company postponed the release of the bank’s annual 10-K report.
In an announcement made today, Coinbase, the biggest cryptocurrency exchange in the United States by trading volume, said it would no longer process transactions to or from Silvergate bank. Coinbase has said that “out of an abundance of caution” and in light of recent events involving the San Francisco-based crypto bank, it will “no longer accept or initiate payments to or from Silvergate.”
The exchange stated:
“Coinbase will be facilitating institutional client cash transactions with our other banking partners and have taken proactive action to help ensure that clients experience no impact from this change.”
Tough Times Ahead
Coinbase also said that “when a client has a large dollar balance,” the monies are held in FDIC-insured U.S. banks or government money market funds. Exchange officials also said their company faces “de minimis corporate exposure to Silvergate.” Just last week, LedgerX, one of the few companies that stayed afloat following the FTX crash, announced that it will also switch to using Signature Bank moving ahead.
The move by Coinbase came only one day after Silvergate Capital Corporation, Silvergate Bank’s parent company, postponed the release of the bank’s annual 10-K report due to concerns that more losses would cause the institution to be “less than well capitalized.”
Silvergate said in an SEC filing on Wednesday that the firm was evaluating how these developments might affect “its ability to continue as a going concern.” As a result of a bank run caused by the FTX collapse, Silvergate had to liquidate assets at fire-sale prices in the preceding quarter, resulting in a loss of $1 billion.
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