Silvergate Capital Cut Ties with Silvergate Exchange Network
- The decision is an aftermath of the reports of SI’s $1 billion loss and the uncertainty on its viability.
- The company also failed to submit the annual report for the year 2022 on time.
Silvergate Capital Corporation (SI), a dominant crypto lender has announced its “risk-based decision” to cut ties with the Silvergate Exchange Network, the internal Silvergate Bank network that allows transfers between Silvergate account holders.
Significantly, following the report on Silvergate Capital’s $1 billion loss and the uncertainty on its viability, the crypto lender declared its decision to “discontinue” its crypto payment network, stating:
Effective immediately Silvergate Bank has made a risk-based decision to discontinue the Silvergate Exchange Network (SEN). All other deposit-related services remain operational.
Notably, on March 1, the Securities and Exchange Commission (SEC) notified that Silvergate Capital has been unable to file with the former its Annual Report for the year 2022 within the prescribed period “without unreasonable effort or expense”.
In addition, the SEC informed that the company is working hard to release the report as soon as possible, quoting:
The Company is currently analyzing certain regulatory and other inquiries and investigations that are pending with respect to the Company. The Company’s independent registered public accounting firm is also requesting detailed information relating to such matters and the Company is responding to such requests.
Interestingly, analysts from the financial company JP Morgan said that there is an “elevated risk” for the further fall of SI shares considering the inability of the bank to remain a “going concern”.
It is worth to be noted that in the previous days, the company shares had a sudden fall of almost 29% in premarket trading. Following the slump, Silvergate had been evaluating the impact of the fall as well as its failure in submitting the annual report on its “ability to continue as a going concern”.