After announcing an investigation into Silvergate’s alleged involvement in the FTX debacle, several cryptocurrency firms announced they would scale back or end their relationship with Silvergate entirely.
Amid news that cryptocurrency exchange Coinbase will no longer accept or initiate payments with Silvergate, companies including stablecoin issuers Paxos and Circle and Mike Novogratz’s Galaxy Digital have announced similar moves in partnership with crypto banks. Galaxy Digital announced on March 2 that it had stopped accepting or transferring money to banks "out of an abundance of caution."
In a separate tweet on March 2, Paxos said it had "stopped all [Silvergate Exchange Network] transfers and wires" to corporate accounts, but would continue to process payments. Circle added that it was “unwinding certain services with Silvergate,” while Bitstamp said its bank transfer service would be provided by “other global banking partners.”
“Please note that Bitstamp is not responsible for any funds deposited into Silvergate Bank accounts,” the company said. "If you do choose to deposit funds into this account, you do so at your own risk."
The termination of its partnership with Silvergate follows reports that the bank is facing an investigation by the U.S. Department of Justice for its alleged involvement in the FTX debacle. Former FTX CEO Sam Bankman-Fried has been charged with wire and securities fraud and money laundering for opening an account with the crypto bank. Silvergate announced in a March 1 filing with the U.S. Securities and Exchange Commission that it does not expect to file its fiscal 2022 report until March 16. Shares of the crypto bank have fallen more than 55% in the past 24 hours, hitting $5.97 at the time of publication.
