Silvergate Bank share drops 50%, Major Crypto Clients Stops ACH operations

[Flexystar]

Silvergate Bank was one of the most crypto friendly bank and had major clients such as Coinbase, Circle, Paxos, Crypto.com, Bitstamp, Cboe Digital Markets, Galaxy and Gemini.

In the recent update, the banks share dropped by 50%, which was due to unclean books and suspicious activities in the banking itself. With ever increasing Federal Bank Loans, Silvergate is further in trouble of filing the taxes this financial year.

It has applied for late 10-K filing because they need time to go through the books and seek help through auditors to resolve the issues. It's no wonder, that above mentioned clients are already fleeing the bank and halting their Automated Clearing House operations.

This further shock to the Silveragte Bank and could aggravate the financial losses further to have bankruptcy.

Imagine this story getting wrong title as, "Major Crypto players left the Silveragte Bank, files the bankruptcy". Could be negative impact on the crypto sphere.

The vast majority of crypto-friendly Silvergate Bank's (SI) industry clients have left or are leaving the company less than a day after it announced it would have to review its books with its auditors and warned of several headwinds. The bank's share price has fallen by more than 50%, to an all-time low, on the day's trading.
Silvergate announced Wednesday it would delay filing its annual 10-K filing due to needing to answer requests from its independent auditors and accounting firm, as well as "regulatory and other inquiries and investigations that are pending." The bank warned in a forward-looking statement that it faced possible inquires from bank regulators and the U.S. Department of Justice, and its ability to "continue as a going concern" over the next year may be affected.
On Thursday, Coinbase, Circle, Paxos, Crypto.com, Bitstamp, Cboe Digital Markets, Galaxy Digital and Gemini all announced they would suspend Automated Clearing House (ACH) transfers and other business operations with the bank, days after crypto derivatives provider LedgerX announced the same. Kraken appears to be the only major crypto exchange to continue using Silvergate, having ended some transactions with rival bank Signature (SBNY) on Wednesday.

Silvergate Bank also said in its filing Wednesday that it would have to repay Federal Home Loan Bank loans that it took out last year.
"Subsequent to December 31, 2022, a number of circumstances have occurred which will negatively impact the timing and the unaudited results previously reported in the Earnings Release, including the sale of additional investment securities beyond what was previously anticipated and disclosed in the Earnings Release primarily to repay in full the Company’s outstanding advances from the Federal Home Loan Bank of San Francisco," the filing said.
Crypto news outlet Protos reported in January that both Silvergate and Signature were tapping FHLB loans, receiving up to $15 billion combined.

Silvergate Stock Drops Over 50% as Crypto Clients Flee Beleaguered Bank

[coupable]

It was announced earlier that the bank sold part of its assets to cover withdrawals at a very high value. The wave of withdrawals began after the bank disclosed that it had failed to submit the financial reports for the year 2022 and that it intended to change the company responsible for auditing. In this report by Forbes magazine, there is a detailed explanation of the causes of the bank's crisis and how it lost half of its stock value in record time.
https://www.forbes.com/sites/dereksaul/2023/03/03/latest-crypto-collapse-bitcoin-and-ethereums-losses-top-24-billion-as-silvergate-unravels/
The bank was holding many assets owned by the famous platform FTX, and it was not originally expected that it would last so long after the collapse of the platform.

[Captain Corporate]

The saddest part is that if a company, any company in the world, bankrupts because they have to give people their money back? Then that company was a ponzi to begin with. Ponzi scheme is a real thing in the banking world, and its overlooked way too much, because nobody has the courage to go balance the sheets, if any government anywhere in the world does that, banks would collapse, and everyone's money will go with it. However, that doesn't change the fact that if customers of ANY bank wanted to withdraw all their money, that bank would bankrupt, and this is basically whats happening with silvergate as well. You could literally withdraw all the money customers have in HSBC, one of the biggest banks in the world, and they would bankrupt too.

[Faisal2202]

Imagine this story getting wrong title as, "Major Crypto players left the Silveragte Bank, files the bankruptcy". Could be negative impact on the crypto sphere.

It takes no big cause to start a fire. If they had planned to make market more volatile in the upcoming days then this news could be of great use to manipulators. well i must say Silverado bank has really helped many users to use the features of mentioned exchanges because i have not able to use them because of bordered limitations but i know the importance and time that these features has saved let me mention some of them for you and it might clear the image what effect does this scrutiny will make on crypto sphere.

• API Integration; to make transactions automatic between crypto exchange to bank.
• ACH(Automated Clearing House feature reduces the cost of withdrawing and using the credit card feature.
• This bank provided collateralized bank loans to its users well this feature needs no further significance.
• This bank is member of FDIC (Federal Deposit Insurance Corporation) which provides insurance of around $250,000 to deposits. no doubt this could be of great relief to there clients heart.

Further the significance of these features can be presumed easily. On the other hand bankruptcy of this bank means no features which might cause some problems to there clients but there is a term called "competitors" which means they must be some competitors of that bank too exist in market which might come up with better plans or at least with same features. Like:

• Signature Bank
• Metropolitan Commercial Bank
• Prime Trust

So overall i must say this bankruptcy might cause some more volatility in the market but that will not be permanent and market can easily bear it. Why? as the clients of silvergate can easily shift to other options. no doubt this will cause them some time and money to open accounts or settle things down but they do not have any other choice though. So overall, things might not go south and market after showing slight downtrend can easily recover well that will also be in the favor of crypto sphere. Further no one could predict the future, my words are not final that is just my observation so dyor and do not use my words to enter market, haha.

[coolcoinz]

I don't care much about these institutions. Bitcoin was made to be an alternative to banks allowing self custody, so there's no reason to use a bank when you're a true crypto believer.
Wil this have an impact on the markets? Sure, it already has because many people are dumb and still try to play both sides, the centralized and the decentralized one. For instance, I wasn't affected by any of the well known altcoin implosions because I don't hold altcoins. I wasn't affected by FTX collapse because I don't hold money on exchanges, and I'm not going to feel a thing when Silvergate or any other lending platform like Celsius goes down. Choose the right path for you, you either go the risky path with all the lending, staking, trading, futures and levers, or you choose the simple and safe path of holding your coins on a hardware wallet and laughing in the faces of scammers.

[dothebeats]

It was announced earlier that the bank sold part of its assets to cover withdrawals at a very high value. The wave of withdrawals began after the bank disclosed that it had failed to submit the financial reports for the year 2022 and that it intended to change the company responsible for auditing. In this report by Forbes magazine, there is a detailed explanation of the causes of the bank's crisis and how it lost half of its stock value in record time.
https://www.forbes.com/sites/dereksaul/2023/03/03/latest-crypto-collapse-bitcoin-and-ethereums-losses-top-24-billion-as-silvergate-unravels/
The bank was holding many assets owned by the famous platform FTX, and it was not originally expected that it would last so long after the collapse of the platform.

That explains it clearly. I thought Silvergate is just engaging in a lot of shady banking practices and that there are no other reason as to why they lost that much stock value in such a short span of time. A lot of people have already hinted that the bank will be on the decline after the fall of FTX as an exchange. Honestly, I'm surprised that the bank managed to stay afloat for months after the collapse of FTX. They have evaded all of those doubt that a lot of their clients casted initially for so long up to this day.

Hopefully, most of those crypto institutions managed to pull out their assets and investments so as to soften the blow in the cryptospace. I'm quite unsure why the crypto market suffers when one of these institutions serving crypto companies fall. It's not as if the crypto market is responsible for the mismanagement and downfall of these institutions anyways.

[naikturun]

If major crypto players like Coinbase, Circle, Paxos, and others are leaving the bank due to suspicious activities and unclean books, it could indicate serious problems with the bank's operations and management. This could lead to financial losses and even bankruptcy for the bank, which would be a significant event for the crypto sphere and the broader financial industry.

[Jating]

If major crypto players like Coinbase, Circle, Paxos, and others are leaving the bank due to suspicious activities and unclean books, it could indicate serious problems with the bank's operations and management. This could lead to financial losses and even bankruptcy for the bank, which would be a significant event for the crypto sphere and the broader financial industry.

Everyone is trying to distance themselves from Silvergate, they don't want their names to associated with it so as early as when the news broke out about the bankruptcy, they leave or let everyone knows that they are not connected to it.

And this is the reason why we plunge this week, when we are trying to break that $25k barrier, this news comes in.

The good part is that it didn't affect us like the Terra Luna or FTX news, we are very much in the think of the bull run of sort above $22k. And it seems that the news have settled down a bit, so maybe we can still go back to that $24k price range again.

[Fivestar4everMVP]

Its rather unfortunate that the effect of the collapse of FTX back in 2022 have not left the crypto space alone, and this have to linger into 2023 when the market was already recovering from the bloodbath we saw and experienced during FTX collapse.
Bitcoin, as well as the crypto market was doing well already, and all of a sudden, every thing began to nosedive, I wondered what was happening and later discovered Silvergate Bank is having issues, if this guys are gonna collapse, then let them get on with it and lets hope this would be that last one, lets hope other companies do not go down with the collapse of this company, else, its gonna be catastrophic for the market and this might affect the much anticipated 2024 bull run.