The crypto industry’s rough patch, which began in 2022, is allegedly continuing in 2023 as the bank holding company, Silvergate, collapses. Its demise has become a hot topic on the social media platform Twitter. The said bank has officially announced that it will be closed and liquidated. The bank’s decision is allegedly based on the collapse of FTX, once one of the largest crypto exchange platforms. Concerns about the Silvergate virus began to loom.
In a press release by Silvergate, they announced that they are opting to wind down their operations and proceed on voluntarily liquidating the said bank “in an orderly manner and in accordance with applicable regulatory processes.” They have referenced the “recent industry and regulatory developments” as their reason for such action. Furthermore, they have also decided that this move was the “best path forward.”
Sheila Warren, CEO of the Crypto Council for Innovation, stated that the “voluntary wind down” falls under California law, implying that they will be able to make depositors whole, with no taxpayer money or the FDIC involved. The FDIC is an organization that serves as a surety for bank depositors.
Binance and Other Crypto Firm’s Stand
Once the news of Silvergate’s declaration swept the internet, other cryptocurrency companies went on to reassure their community about their own situation within their individual organization. Changpeng Zhao, CEO of Binance, the largest cryptocurrency exchange platform, is one of them. He stated that there have been no asset losses at Silvergate and noted that the exchange’s funds remain secure.
This tweet from the Binance CEO was followed by different claims from many other crypto companies claiming that just like Binance they are not impacted by the collapse of Silvergate as well. Coinbase has reportedly denied having any client or corporate cash at Silvergate.
Coinbase has allegedly stated that they were sorry for the tough decision that Silvergate had to opt for, which is to wind down their operations. Coinbase has also acknowledged the part that Silvergate has played in the growth of the crypto economy by stating that the said bank has served as a partner & contributor to the industry. Coinbase then went on stating that they do not have any client or corporate cash at Silvergate, therefore their client’s funds continue to be safe, accessible & available.”