Thursday, March 23, 2023

The crypto bank Silvergate collapses on the stock market due to doubts about its viability

Silvergate Capital, an American bank specializing in services for cryptocurrency businesses, collapsed on the stock market on Thursday after admitting that it is evaluating its ability to continue operating as a result of the impact of problems in the sector.

The entity’s titles fell around 45% on Wall Street after the publication of a letter addressed to the stock regulator in which Silvergate said that it will not be able to present its annual report on time and in which it warns of the difficulties it is experiencing.

The bank has been affected, among other things, by the collapse of the FTX cryptocurrency platform and is being investigated by US authorities for its business with that firm and its investment arm, Alameda Research.

FTX and Alameda are charged with fraud and several of their managers have already pleaded guilty, while their former top manager, Sam Bankman-Fried, is on probation awaiting trial.

Amid a crisis of confidence in the industry, Silvergate Capital was forced to divest shares to satisfy withdrawals from cryptocurrency users.

According to its provisional accounts, Silvergate Capital suffered a net loss of almost $1 billion in 2022, compared to profits of $75.5 million the year before.

The entity is one of the few in the United States specialized mainly in the crypto business and this Thursday Coinbase, one of the large platforms in the sector, announced that as a precaution it has stopped accepting or initiating payments to and from Silvergate.


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