The stablecoin issuer, Tether, joins the long list of crypto firms to turn their backs on troubled crypto-friendly bank Silvergate, confirming zero exposure to the firm.
The sudden move from crypto firms was after Silvergate announced in a filing made on March 1 with the U.S. Securities and Exchange Commission (SEC) that it is not submitting its 10-K report by March 16, 2023, for the fiscal year 2022.
Silvergate stated it requires more time to allow its independent registered public accounting firm to finish many auditing tasks. The shares of Silvergate took a hit after the postponement announcement, already dropping more than 55% in the past day.
Soon after the announcement, crypto firms started distancing themselves from Silvergate, allegedly suspecting bankruptcy. Coinbase announced it is “no longer accepting or initiating payments to or from Silvergate.”
Stablceoin issuer Circle announced, “We are sensitive to the concerns around Silvergate and are in the process of unwinding certain services with them and notifying customers.”
Other crypto firms, such as Bitstamp, Microstrategy, Paxos, Galaxy Digital, etc., took similar measures to break away from the troubled bank. Silvergates relations with FTX and Alameda Research again came to light after this commotion.
In December 2022, Silvergate CEO Alan Lane tried to dispel rumors in a public letter after facing accusations of being partially responsible for the FTX crash. As per a class-action lawsuit, Silvergate knowingly or negligently authorized FTX to divert client deposits to Alameda Research.
Also Read: Lawsuit Filed Against Silvergate over FTX & Alameda Relations
