The fall of FTX finally took over Silvergate Bank. A bank for crypto players in the US is liquidating its operations, its parent company Silvergate Capital said in a document sent to the financial market regulator.
The liquidation of Silvergate Bank will plunge the cryptocurrency ecosystem further into depression as access to the banking system becomes increasingly limited. Silvergate allowed them to trade in dollars. On the other hand, all of its clients will get their deposits back, he said.
Bank for all major platforms and stablecoins
Senator Elizabeth Warren, who more or less predicted the 2008 crisis and regularly denounces the excesses of global finance, considered the fall of Silvergate Bank “predictable.” “I warned that Silvergate’s activities were risky, if not illegal. Consumers should now be compensated and regulators should take action against crypto risks.” Other observers question the bank’s control procedures.
Silvergate Bank recently lost large clients including Coinbase, Paxos, Cypto.com, Circle, Galaxy Digital and Gemini due to capital problems. It has previously survived the bankruptcy of its FTX and Genesis clients. Many dollar-backed stablecoins (and therefore presumably foreign exchange reserves) were also held by Silverbank.
Monumental bank run sparked by FTX scandal
The bank began about thirty years ago as a completely classic real estate bank, before moving to cryptocurrencies in 2014. But in 2022 there was a crash. In the fourth quarter alone, his clients withdrew $8.1 billion from the bank, which lost $1 billion during that period.
Silvergate also bought in January 2022 technology developed by Facebook for the Diem stablecoin project, a damned project that will definitely never see the light of day.
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