Coinbase does not accept payments via Silvergate
2023.03.02 12:16
Coinbase does not accept payments via Silvergate
By Kristina Sobol
Budrigannews.com – Citing an ongoing investigation, cryptocurrency exchange Coinbase announced that it had ended its partnership with Silvergate Bank as its United States dollar banking partner. The exchange went as follows in a tweet:
“Coinbase is no longer accepting or initiating payments to or from Silvergate in light of recent developments and out of an abundance of caution.”
Signature Bank, the crypto exchange’s other banking partner, will facilitate institutional client cash transactions for its prime customers.
In pre-market trading, the stocks of Silvergate Bank, which were already in trouble due to a delay in filing its annual 10-K report, dropped another 40%. JP Morgan also downgraded Silvergate Capital from neutral to “underweight” as a result of the insolvency concern.
The Securities and Exchange Commission of the United States requires companies to submit a 10-K report every year to get a complete picture of their business and financial standing. The crypto bank had stated that it would need two more weeks to finish the report for the fiscal year 2022.
Instructions for making payments in pounds or euros won’t be affected by the decision.
The FTX crypto exchange’s demise marked the beginning of the fintech bank’s difficulties. Due to its numerous crypto partners, Silvergate Bank, which is also known as the “crypto bank,” is currently the subject of an investigation by the U.S. Department of Justice regarding its role in the FTX collapse. The former CEO of FTX, Sam Bankman-Fried, is the subject of the investigation.
Silvergate Bank’s CEO Alan Lane and two of his companies, FTX and Alameda Research, were accused of “aiding and abetting” a “multibillion-dollar fraudulent scheme orchestrated by Sam Bankman-Fried (SBF)” in a separate civil lawsuit.
Silvergate became one of the most shorted stocks in the current market as a result of ongoing investigations and partnership terminations. The Financial Industry Regulatory Authority reports that by the end of January, more than 72% of Silvergate Capital stock had been shorted.
As the story progresses, more details will be added as they become available.
