Silvergate continues to face difficulties after its stock price fell by more than 55% in the last week.
Silvergate Bank, a Californian bank that specializes in providing financial infrastructure to the cryptocurrency trading industry, has ceased its crypto payment network.
The news was revealed on March 3rd on its website, claiming that it is a “risk-based decision.” The move comes the same week Silvergate’s stock price dropped by more than 50%.
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The statement shared on the Silvergate website reads:
Effective immediately Silvergate Bank has made a risk-based decision to discontinue the Silvergate Exchange Network (SEN). All other deposit-related services remain operational.
On top of that, on March 3rd, United States Judge Michael Kaplan ordered Silvergate Bank to return BlockFi’s deposit of $9.8 million. It is worth noting that Silvergate and BlockFi have both been affected by the collapse of the crypto exchange FTX.
In January, Silvergate revealed that it had recorded a net loss of $1 billion in the fourth quarter of 2022. Afterward, the crypto bank reportedly borrowed around $3.6 billion from the US Federal Home Loan Banks System to fill the gaps created by the net loss.
Last week, Silvergate’s stock prices took a deep dive after the company revealed that it is set to delay the release of its Form 10-K for two weeks. The document is an annual report which must be submitted to the US SEC displaying the company's general health.
Following the delay, the crypto community was full of FUD (fear, uncertainty, and doubt) regarding the Silvergate Bank. On top of that, at the beginning of February, the news broke that the United States Department of Justice (DoJ) launched an investigation into Silvergate over its ties with Alameda Research and FTX.
Several crypto firms, including Coinbase, Paxos, Circle, Galaxy Digital, and Bitstamp, revealed that they are cutting their ties with crypto-friendly bank Silvergate.
On March 3rd, Silvergate Bank's stock trading closed at $5.77.
