• Silvergate Bank’s share price has plummeted over 50% after its crypto industry clients announced they would suspend business with the bank.
• The bank said it needed to answer requests from independent auditors and regulatory agencies, and it was facing potential inquiries from the US Department of Justice.
• Coinbase, Circle, Paxos, Crypto.com, Bitstamp, Cboe Digital Markets, Galaxy Digital and Gemini have all suspended their operations with Silvergate Bank.
Silvergate Stock Drops Over 50%
Silvergate Bank (SI)’s stock price has taken a beating on news that its cryptocurrency industry clients are suspending operations with the bank. The bank had previously warned of several headwinds they were facing including possible inquiries from regulators and the US Department of Justice as well as an audit request by its independent auditors.
Crypto Clients Fleeing Beleaguered Bank
Coinbase, Circle, Paxos, Crypto.com, Bitstamp, Cboe Digital Markets, Galaxy Digital and Gemini have all announced that they will no longer be doing business with Silvergate Bank due to these uncertainties surrounding the financial institution. Kraken is currently the only major crypto exchange continuing to use Silvergate after ending some transactions with rival Signature Bank (SBNY).
Review of Books With Auditors
Silvergate has been forced to delay filing its annual 10-K filing while they review their books with their auditors and answer any inquiries or investigations that may arise in connection with this review process. The bank also warned investors in a forward-looking statement that their ability to continue as a going concern over the next year may be affected by these events.
Repayment of Federal Home Loan Bank Loans
The bank further revealed that they may need to repay loans taken out last year from Federal Home Loan Banks which could put additional strain on their finances. As a result of this news and its impact on investment confidence in the company’s future prospects fo success; shares in Silvergate dropped more than 50% to an all-time low on Wednesday’s trading session.
Kraken Remains Loyal To Silvergate
Kraken remains loyal to Silvergate by continuing do business through them despite other companies leaving for greener pastures elsewhere; however no comment was given when asked about this situation specifically .