• Coinbase announced that it would not accept payments from or to Silvergate.
• LedgerX reportedly ended its relationship with the crypto bank.
• Silvergate’s value plunged in after-hours trading and delayed its filing of annual report to the SEC.
Coinbase Drops Alliance With Silvergate
Coinbase, a U.S.-based crypto exchange, has announced that it will no longer be accepting or initiating payments to or from Silvergate, a crypto-focused bank, due to recent developments and out of an abundance of caution. Additionally, LedgerX, a derivatives trading platform, also reportedly ended its ties with the bank.
In its SEC filing yesterday, Silvergate stated that it was evaluating its ability to survive as a going concern and delayed its annual report filing until March 16th 2023. The bank also noted that it expects to record further losses related to the other-than-temporary impairment on the securities portfolio which could result in the company being less than well-capitalized.
Coinbase reassured customers that all funds are safe and accessible and will be using other banking partners for institutional clients going forward. The firm added that large dollar deposits are held in a U.S. government money market fund and they have de minimis corporate exposure to Silvergate.
Impact On Clients
The crypto exchange stated that it has taken proactive action so clients will experience no impact from this change. Furthermore, Coinbase reiterated that all client funds continue to be safe, accessible & available despite their alliance ending with Silvergate Bank
In light of these recent events surrounding silver gate Banks’ financial situation Coinbase has chosen to end their relationship with them through withdrawing support for payments towards or from them out of an abundance of caution for client safety .