Key facts:
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The closure of the Silvergate Exchange Network was announced with immediate effect.
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Companies like Tether and MicroStrategy discussed their relationship with Silvergate.
Silvergate Capital Corporation announced the closure of its cryptocurrency payment network this Friday, March 3. The parent company of Silvergate Bank, a bank that offers cryptocurrency services, added that the decision was effective immediately.
Upon entering the website From the company a brief advisory message can be read: “Effective immediately, Silvergate Bank has made a risk-based decision: to discontinue the Silvergate Exchange Network (SEN). All other services related to deposits remain operational.
Silvergate Exchange Network was one of Silvergate’s flagship products. It was a liquidation network that connected companies, large investors and exchanges 24 hours a dayan advantage over traditional banks and their settlement systems that could take days in some cases.
Between the clients of this servicethere were well-known companies in the industry, such as Binance.US, Kraken o Gemini. According to Coindesk, a company spokesperson sent a message similar to the one that appears on the portal directly to Silvergate clients and companies in the world of cryptocurrencies.
Silvergate Capital had previously questioned its ability to stay operational this year. As we reported in CriptoNoticias, the company was reassessing its businesses and strategies, something that has led to the immediate closure of SEN.
The Silvergate news had hit the cryptocurrency market lower. Bitcoin (BTC) fell below $23,000, the top 100 altcoins entered a big dip scenario, and upside traders lost about $200 million.
Silvergate was one of dozens of companies affected by the bear market and the FTX exchange debacle late last year. Market fears respond to the possible ripple effect that another downturn like this could have on other companies of the industry.
Silvergate would return nearly $10 million to BlockFi; other companies disengage
On the same Friday, Judge Michael B. Kaplan issued an order requiring Silvergate Bank to return $9.85 million to the BlockFi company, which had deposited it in Silvergate’s reserve fund.
Documents released by BlockFi’s restructuring adviser realize of that decision, which was issued by reference to an agreement between Silvergate and BlockFi dating from November 2022.
Meanwhile, companies like Tether Limited (issuer of the USDT stablecoin) and MicroStrategy, the publicly traded company with the most bitcoins in its reserves, the potential collapse of Silvergate has been decoupled.
In the case of Tether, its CTO Paolo Ardoino simply public that they do not have any exposure to Silvergate Bank; For its part, MicroStrategy reported that its only link to Silvergate is the pending payment of a $205 million loan that matures in the first quarter of 2025. But its bitcoin collaterals they are not guarded by the bank, they claimed.
