Coinbase and Paxos Terminate Relationship With Silvergate Bank
- Both crypto exchange Coinbase and stablecoin issuer Paxos have stated that they will no longer accept or initiate U.S. dollar payments through Silvergate Bank.
- The two noted that cash transactions for institutional clients will now be carried out through their other banking partners, and that the move had no impact on pound and euro payments.
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Cryptocurrency exchange Coinbase has terminated its partnership with Silvergate, and will no longer facilitate dollar payments through the troubled bank, the company said via Twitter on 2 March.
According to the announcement, Coinbase decided to switch away from Silvergate Bank’s services in light of “recent developments” and out of an “abundance of caution” for its institutional clients funds. The company noted that U.S. dollar-based transactions for institutional clients will now be carried out through its other banking partner, Signature Bank. The company tweeted:
Coinbase also added that the decision will have no impact on payments in pounds or euros, and that the exchange had minimal exposure to the crypto-focused bank. The announcement send the stock price of Silvergate — which was already under pressure due to a delayed 10-K annual filing — down by more than 40%.
Coinbase is not the only company to end its relationship with Silvergate today. Stablecoin issuer Paxos also announced via Twitter that it will discontinue all SEN transfers and wires to Silvergate accounts, and noted that it did not have “any material exposure” to the bank.
Silvergate’s troubles began with the fall of cryptocurrency exchange FTX, and the crypto-focused bank is now facing an investigation from the U.S. Department of Justice for its involvement in the collapse of FTX. Another lawsuit accuses Silvergate and its CEO Alan Lane of “aiding and abetting” a multibillion-dollar fraudulent scheme orchestrated by the former CEO of FTX, Sam Bankman-Fried.
- The New York Jurors took 4 fours of deliberating before pronouncing the former FTX CEO guilty of all seven charges of fraud and conspiracy to commit fraud.
- Bankman-Fried will now have to appear in court on 28 March, 2024, where he will face a potential maximum sentence of 115 years in prison.
Former CEO of FTX Sam Bankman-Fried leaves the Federal Court in New York after pleading not guilty, 3 January, 2022.
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- A little over $13 million in altcoins were sent to crypto exchanges Binance and Coinbase in the past 24 hours, which is in accordance with a September court order.
- The court ordered a phased liquidation process, which allows the bankruptcy estate to sell $3.4 billion worth of digital assets over a certain period of time.
- Joseph Pimbley, a member of litigation consulting firm PF2 Securities, will try to rebuff testimonies from Caroline Ellison, Gary Wang, Nishad Singh, and Adam Yedidia.
- During his testimony Pimbley will try to establish a timeline for the FTX-Alameda line of credit, and convince the jury it fluctuated between $1 billion and $3 billion between 2021 and 2022.