The Biden Administration is “aware of the situation” at Silvergate and will continue to monitor reports on the troubled bank as it unfolds, according to a White House spokesperson.
Speaking at a press briefing on March 6, Press Secretary Karine Jean-Pierre said the White House has noted that Silvergate marked another major crypto firm to “experience significant issues” in recent months, but declined to go into any further specifics on the firm.
“In recent weeks banking regulators have released guidelines on how banks should protect themselves from risks associated with crypto,” she said, adding that:
“This is a president that has repeatedly called on Congress to take action to protect everyday Americans from the risk posted by digital assets and he will continue to do so. We won’t speak to this particular company as we have not with other cryptocurrency companies, but we will continue to monitor the reports.”
Silvergate, known as a “crypto bank” was a key banking partner to a number of major crypto companies and projects.
However, uncertainty over the bank’s solvency began to spread at the start of March, after Silvergate delayed the filing of its annual 10-K report by two weeks. A 10-K report is a legally required document that provides a comprehensive overview of a company’s business and financial condition.
On the back of that news, Coinbase announced on March 2 that it had terminated its partnership with Silvergate, as the crypto exchange also alluded to concerns over the Department of Justice’s investigation into the firm over involvement in the FTX collapse.
At Coinbase all client funds continue to be safe, accessible & available.
In light of recent developments & out of an abundance of caution, Coinbase is no longer accepting or initiating payments to or from Silvergate.
— Coinbase (@coinbase) March 2, 2023
Several crypto heavyweights promptly followed suit by either cutting ties or distancing themselves from the bank, including Circle, Paxos, Bitstamp, Galaxy, MicroStrategy and Tether to name a few.
On March 4, Silvergate also announced that it was shutting down its digital asset payment network Silvergate Exchange Network due to “risk-based” concerns, sparking further uncertainty over the firm’s financials.
Related: Investor concerns persist as crypto investment products see 4th week of outflows
As a result, Silvergates stock price (SI) has plummeted roughly 60% since…
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