Beleaguered crypto-friendly company Silvergate Bank is gradually veering towards becoming an outcast in the digital asset industry.
This has become the case with the likes of Microstrategy, Tether, Crypto.com, and Gemini severing their relationship with the bank. As it stands, many of these aforementioned crypto firms have suspended deposits from Silvergate Bank, according to a March 2nd statement.
Tether Chief Technology Officer (CTO) Paolo Ardoino confirmed on Twitter that “Tether does not have any exposure to Silvergate.”
American business software vendor MicroStrategy clarified that its over 130,000 Bitcoin (BTC) are not in Silvergate’s custody. However, the business intelligence firm explained that it still had a loan to pay to the bank which is not due until the first quarter of 2025.
While many fear that the recent happenings at Silvergate Bank may eventually lead to a bankruptcy filing, MicroStrategy says that neither bankruptcy nor insolvency will force its repayment unless when due.
“We have a loan from Silvergate not due until Q1 ‘25. There are mkt concerns re SI’s fin. condition. For anyone wondering, the loan wouldn’t accelerate b/c of SI insolvency or bankruptcy. Our BTC collateral isn’t custodied w/ SI & we have no other financial relationship w/ SI.” MicroStrategy tweeted.
Crypto Firms Reject Deposits Via Silvergate
Winklevoss brothers’ Gemini Exchange announced that it has suspended any deposit or withdrawal from ACH or wire transfers via the Silvergate platform. Also, no customers’ funds are currently stored in Silvergate. Noteworthy, Gemini Exchange recently terminated its Master Loan Agreement (MLA) and its Earn Program with Genesis Global Trading.
Similarly, Bitstamp which was the launch partner for Silvergate’s SEN Leverage product has declared that its platform no longer supports United States dollar transfers through Silvergate. Based on the blog post made by Bitstamo, such USD transfers will now be conducted through other global banking partners. The method of transfer for users was also outlined in the post.
All of these unfortunate situations began after Silvergate announced the postponement of its 10-K document filing with the Securities and Exchange Commission (SEC). The innovative financial infrastructure solutions provider has asked for additional two weeks to complete its comprehensive report. The request contributed to a more than 30% drop in its stock price.
