Cryptocurrency News

White House Notified of Silvergate’s Pre-Bankruptcy Status

2023.03.07 04:14

White House Notified of Silvergate's Pre-Bankruptcy Status
White House Notified of Silvergate’s Pre-Bankruptcy Status

White House Notified of Silvergate’s Pre-Bankruptcy Status

By Tiffany Smith

Budrigannews.com – According to a White House spokesperson, the Biden administration is “aware of the situation” at Silvergate and will continue to monitor the unfolding reports on the troubled bank.

At a press conference on March 6, Press Secretary Karine Jean-Pierre said that the White House had noted that Silvergate was another major crypto company that had “significant issues” in recent months. However, she declined to provide any additional details regarding the company.

She went on to say that: “In recent weeks, banking regulators have released guidelines on how banks should protect themselves from risks associated with crypto.”

“This president has called on Congress to take action to shield everyday Americans from the danger posed by digital assets on multiple occasions, and he will continue to do so. We won’t talk to this company, as we haven’t talked to any other cryptocurrency companies, but we will keep an eye on the reports.

Silvergate, also known as a “crypto bank,” was a crucial banking partner for numerous significant crypto projects and businesses.

However, at the beginning of March, Silvergate’s two-week delay in submitting its annual 10-K report exacerbated concerns about the bank’s solvency. A comprehensive overview of a company’s business and financial condition is provided in a 10-K report, which is a legally required document.

Coinbase announced on March 2 that it had ended its partnership with Silvergate in response to that news. The crypto exchange also made reference to concerns regarding the Department of Justice’s investigation into Silvergate regarding its involvement in the collapse of FTX.

All customer funds remain safe, accessible, and available at Coinbase.

Coinbase is no longer accepting or initiating payments to or from Silvergate due to recent developments and an abundance of caution.

Circle, Paxos, Bitstamp, Galaxy, MicroStrategy, and Tether, to name a few, were among the crypto giants that swiftly followed suit by either cutting ties with the bank or distancing themselves from it.

Additionally, on March 4, Silvergate made the announcement that it would be ceasing operations of its digital asset payment network, Silvergate Exchange Network, as a result of concerns that were “risk-based,” which added to the sense of uncertainty surrounding the company’s finances.

Since March 1, Silvergate’s stock price (SI) has dropped by about 60%, and the total crypto market cap has dropped by about 5.5% to $1.072 trillion.

in March, speaking with CNBC. 6, the Crypto is Macro Now newsletter’s author, economist Noelle Acheson, suggested that Silverbank’s ties to traditional finance would give regulators more reason to crack down on crypto if the bank went bankrupt.

According to Acheson, “up to this point we’ve been able to say that the fallout of everything that happened last year was contained within the crypto industry — painful, but contained.”

“The regulators will be able to say, ‘aha, systemic risk, we told you so,’ if Silvergate fails. That will increase their choke on fiat access for crypto businesses and give them even more ammunition to pursue cryptocurrency.

White House Notified of Silvergate’s Pre-Bankruptcy Status

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