Silvergate Bank Crisis Rocks Crypto Exchanges: $1 Billion Wiped Out
• Silvergate, a crypto-friendly bank announced its orderly liquidation.
• Major crypto exchanges distanced themselves from the crisis, claiming they have no assets in Silvergate.
• The collapse of Silvergate raises questions about the banking services for the digital asset industry.
Silvergate Announces Orderly Liquidation
Crypto-friendly bank Silvergate announced orderly liquidation on Wednesday, wiping out $1 billion in value and sparking panic in the crypto markets. Several major crypto exchanges scrambled to distance themselves from the potential fallout. Binance CEO Changpeng Zhao (CZ) tweeted that Binance has no „asset losses“ at Silvergate and that funds are ‚SAFU‘. Coinbase also claimed that it had no client or corporate cash at Silvergate and that client funds are safe, accessible, and available. OKX President Hong Fang said that team had done a great job of managing risk and minimizing exposure to Silvergate.
Why Did Major Exchanges Move Assets Away From Silvergate?
Binance moved its assets from Silvergate in 2021 with some $400 million being transferred to trading firm Merit Peak according to Reuters. Huobi and Kraken did not issue public statements about Silvergate but other major exchanges claimed they have no assets in Silveragate as of Thursday.
What Does This Mean For Crypto Banking Services?
The collapse of a major crypto-friendly bank will likely make access to banking services even more tenuous for crypto firms. This raises questions about the ability of US banks to serve the digital asset industry and underscores the importance of options like Merit Peak which offers users an alternative way to store their cryptocurrency securely without relying on traditional banks or centralized custodial services.
SEC’s Crackdown On Airdrops
The SEC is cracking down on unregistered airdrops which may soon be illegal according to recent reports by Bloomberg Law. These unregistered securities offerings often involve sending “free” coins or tokens to Vitalik Buterin or other high profile figures in exchange for promotion or publicity which is deemed illegal by regulators under existing US securities law.
Conclusion
The collapse of Silvergate Bank highlights how fragile access to banking services can be for crypto firms and raises important questions about how companies can safely move their money without relying on traditional banks or centralized custodial services in order to stay compliant with securities laws while also protecting user funds from theft or fraud.