More crypto firms are distancing themselves away from the crypto-friendly bank Silvergate as digital asset markets dip across the board.
Recently, Silvergate’s stock plummeted by over 60% in just a few days as it saw prominent crypto companies, such as the leading US-based crypto exchange platform Coinbase and stablecoin issuer Paxos, cut ties with it for cautionary reasons.
Now, other high-profile firms have come out and said they have stopped accepting or initiating transfers with the bank for related reasons as the two leading digital assets by market cap, Bitcoin (BTC) and Ethereum (ETH), see price dips of about 5% during the last days.
Crypto investment firm Galaxy Digital says they have no exposure to Silvergate but will stop working with the bank to ensure its customers’ assets are safe.
“Galaxy has stopped accepting or initiating transfers to Silvergate. As a firm, we continue to have no material exposure to Silvergate, and this action was taken out of an abundance of caution. This step was part of our vigorous risk-management process to ensure client and firm assets are secure.”
Similarly, crypto exchange Bitstamp says they will no longer be processing transfers with Silvergate as a precautionary measure.
“As a precautionary measure in light of recent news, we are no longer processing transfers with Silvergate. Bank transfer services will now be provided by our other global banking partners.”
Payments platform and USD Coin (USDC) issuer Circle says the firm is “unwinding” certain services related to the bank.
“We are sensitive to the concerns around Silvergate and are in the process of unwinding certain services with them and notifying customers. Otherwise, all Circle services, including USDC are operating as normal.”
Lastly, crypto exchange Gemini, founded by the Winklevoss twins, says it has stopped accepting ACH [automated clearing house] transfers through Silvergate.
“We are actively monitoring the situation with Silvergate Bank. We currently have zero customer funds and zero GUSD [Gemini Dollar] funds held at Silvergate…
In addition, we have stopped accepting customer deposits/processing withdrawals via ACH and wire transfers through Silvergate to the Gemini exchange.”
Silvergate’s stock is trading for $5.77 at time of writing. On the first day of the month, it was moving for $13.48.
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Generated Image: Midjourney