Signature Bank’s Stock Sinks 10% as Silvergate Prepares to Shut Down

  1. Home
  2. Cryptocurrency
  3. Signature Bank’s Stock Sinks 10% as Silvergate Prepares to Shut Down

Signature Bank’s Stock Sinks 10% as Silvergate Prepares to Shut Down

| | Cryptocurrency |

Things are looking grim for the U.S.-based, crypto-friendly banks.

Shares of Signature Bank fell Thursday after Silvergate, another leading bank for crypto firms, said it plans to wind down operations.

Signature’s stock price fell upwards of 10% to around $92.40 per share, its lowest price in over two years. Silvergate’s stock price plummeted over 20% to around $3.88.

The bank said it plans on repaying bank deposits to customers in full. The announcement came after Silvergate said it would shut down its Silvergate Exchange Network (SEN), a round-the-clock settlement service used by its clients.

Over the past week, multiple firms native to the digital assets industry have stepped away from Silvergate. At least four cryptocurrency exchanges including Coinbase and Gemini said their relationship with Silvergate would change as well as stablecoin issuers Circle and Paxos.

Investment firm Galaxy Digital warned it has stopped accepting or initiating transfers to Silvergate. Firms like Tether and MicroStrategy—which has the largest Bitcoin treasury among public companies—took to Twitter to quell fears about their potential exposure to the bank’s closure. MicroStrategy received a $205 million loan from Silvergate last March.

Silvergate’s stock price has been in a free fall since the bank delayed the filing of its annual financial report with the Securities and Exchange Commission last week, signaling it sustained more losses during the final quarter of last year than previously reported.

In its initial earnings report, Silvergate reported that it had $11 billion in total assets as of the end of last year. For the same period, Signature reported it had $110 billion in total assets, according to the New York-based bank’s most recent earnings release.

Silvergate’s decision to close down has caused cryptocurrency prices to tumble. Ethereum and Bitcoin fell Thursday by 1.6% and 2.5%, respectively.

Though Silvergate’s troubles could result in more companies tapping Signature as a banking partner that’s familiar with crypto, Thursday’s declines suggest investors are hesitant towards banks that are involved with the asset class more broadly.

Last month, Signature was hit with a class-action lawsuit over its prior relationship with bankrupt cryptocurrency exchange FTX, which alleged Signature “had actual knowledge of and substantially facilitated the now-infamous FTX fraud.”

Growing List of Crypto Companies Cutting Silvergate Ties

Companies throughout the digital assets industry distanced themselves from Silvergate Thursday after the crypto-friendly bank delayed the filing of its annual 10-K report with the Securities and Exchange Commission (SEC) In its notice to the SEC filed yesterday, the bank signaled its financial health could be different than previously disclosed, having sustained more losses during its fourth fiscal quarter of last year than it initially reported in January. In response, Silvergate’s stock price …

Last year, Signature said it planned to reduce its exposure to the digital asset industry by decreasing bank deposits for crypto firms. The bank reaffirmed that priority in a statement released Wednesday.

“We have repeatedly communicated that our relationships in the digital asset space are limited to U.S. dollar deposits only,” Signature President and COO Eric Howell said. “We remain fully committed to executing on our plan to deliberately reduce these deposits further.”

Tags No Tags

Related Post:

Crypto Wallets and Self-Custody Are Back in the Spotlight, and Core Wallet Leads the Way

April 2, 2023 0

OP Price Analysis: OP Price may take a downward correction

April 1, 2023 0

SOL’s Bear Reign Persist: Is there a Potential for Trend Reversal?

March 31, 2023 0

This is why the RBIS Token Could be on the Brink of a Great Price Surge

March 30, 2023 0

Meme Coin Project SafeMoon Rekt for $9M Due to Public Mint Bug

March 29, 2023 0

‘Flatcoin’ Builders Respond to Coinbase Call to Deploy on Layer-2 Network Base

March 28, 2023 0

Is ChatGPT far more important than cryptocurrencies? AI creator and top crypto mining processor producer explains

March 27, 2023 0

Here’s why RenQ Finance (RENQ) will reach the top 25 coins faster than any of the new-age tokens

March 25, 2023 0

OKX Burns $180 Million in OKB, Whale Alert Reports Massive Outflows to Anon Wallets

March 24, 2023 0

IOTA and Web3 Builder NakamaLabs explore the benefits of tokenization with real-world use cases

March 23, 2023 0

HedgeUp Presale nearing $500k raised. Price Increase Imminent as Traction Builds

March 22, 2023 0

TeslaCoin Review – Scam or Legitimate Trading Software?

March 21, 2023 0

Arbitrum’s Airdrop Is Just Around the Corner—How Much Will ARB Be Worth?

March 20, 2023 0

Turkish bank wants to take control of Stablex, a crypto trading platform

March 19, 2023 0

Ecoin Finance: a suspicious project leveraging a defunct UK company

March 18, 2023 0

Solana NFT marketplace Formfunction to shut down

March 17, 2023 0

Doodles ‘No Longer an NFT Project’ and Won’t Cater to Speculators, Co-Founder Says

March 16, 2023 0

ANKR recent major partnerships and projects have led to a steady 18% gain – What does the future hold?

March 15, 2023 0


TOP