Jamie McNeill
Silvergate is a bank that was founded in 1988, and began their venture into the world of cryptocurrencies in 2013, meaning that they were one of the first licensed banks to be offering such services.
As such, they have been able to help the industry in all manner of ways and have been a vital source of liquidity for many of the largest companies.
Silvergate is one of the most important banks in the world of crypto
Silvergate is one of the most important banks in the world of crypto thanks to their links with the likes of Coinbase and Microstrategy.
Silvergate is hugely important because it extends credit to many of the largest firms in the industry, and although they have explained that they never loaned money to FTX or Alameda, a lot of the firms that they did loan money to have been caught in the crossfire.
Silvergate reports a $1 billion loss
Silvergate has reported a $1 billion loss for the fourth quarter of 2022, thanks to the turmoil that has ravaged the markets in the light of a string of multi billion dollar bankruptcies.
The $1 billion loss might manageable for the bank given their relative size, but it has nevertheless done some damage to their reputation and caused investors to be skittish.
Guess who else shows up in the creditors list in the #GK8 / #CelsiusNetwork bankruptcy?
It's everyone's favorite "crypto-friendly" banks… both @SilvergateBank and #SignatureBank make an appearance along with a lot of RUSSIAN FEDERATION.@AureliusValue @Bitfinexed $SI $SBNY pic.twitter.com/lLCxue5UW1
— ⚯ M Cryptadamus ⚯ | @[email protected] (@Cryptadamist) January 18, 2023
However, Silvergate are certainly not in the clear, and many are concerned about their solvency moving forward.
Nevertheless, the CEO insists that the company’s mission is unchanged, and that they remain determined to offer high value services to the digital asset space, reflecting their bullishness on the industry moving forward despite the turmoil that ensured in 2022.
The bank will offboard certain customers and eliminate some services
In order to stay true to their vision, the bank will begin to offboard many of their clients that they deem to be too high risk, and will cease to offer a range of services that are too complex and mire them in too many difficulties, such as their custody services for digital assets.
Another of their services that the bank is to be winding down is their offering of mortgage loans, thanks to the diminished interest in the sector as of late, with the number of people buying homes having been significantly reduced in the first quarter of 2023.
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This article was written for Business 2 Community by Jamie McNeill.
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