• Silvergate Bank recently filed that losses might leave it with less capital than it needs, leading to the suspension of its SEN Platform.
• Coinbase, Galaxy, and Paxos have stopped accepting transfers via Silvergate Network.
• USDC stablecoin issuer Circle has moved its USDC reserve deposits out of Silvergate Bank to other banks as the bank’s woes deepen.
Silvergate Bank Troubles
Silvergate Bank in a filing on Wednesday said losses might leave it with less capital than it needs. The bank recently closed its SEN Platform which institutions used to move money to crypto exchanges. Coinbase, Galaxy, and Paxos have stopped accepting transfers via Silvergate Network due to the ongoing uncertainty at the bank.
Circle Moves Its USDC Reserve Deposits
USDC stablecoin issuer Circle has today announced that it has moved its USDC reserve deposits out of Silvergate Bank to other banks as the bank’s woes deepen. In the press statement, Circle said that it had made the decision to move the small percentage of USDC it held in Silvergate because of the ongoing uncertainty at the bank.
Protecting Reserve Funds
Circle noted that its top priority is protecting the reserve funds backing USDC even if it meant cutting off ties with Silvergate Bank. Interestingly, Circle started withdrawing its USDC deposits from Silvergate last year as signs of trouble and broader crypto asset risk exposure became increasingly visible on Silvergates end. Circle has maintained that its USDC reserves are held in the Circle Reserve Fund and several well-capitalized US banks. The Circle Reserve Fund holds 80% of the USDC reserves which are reviewed on a monthly basis by Deloitte, a leading audit firm.
Previous Crypto Partners Cut Ties With The Bank
On Wednesday, Silvergate set off alarms with a filing that said losses might leave the bank with less capital than it needs, and that it was evaluating its ability to continue. The bank also suspended preferred stock dividends leading key partners including Paxos Trust Co., Coinbase Global Inc., and Galaxy Digital Holdings Ltd cutting off ties with silver gate . Other crypto firms also decided to stop accepting or making payments through silver gate .The huge exodus of partners threatens silver gates key source of deposits seeing that is was a major cryptocurrency player in U S A .
In conclusion , despite all these setbacks , circle is determined to protect investors funds by moving them from silver gate network into more secure banks for safe keeping .