Myriad Crypt firms are pulling back their partnership with crypto-friendly bank Silvergate after seeing a downfall in its shares due to a delay in submitting an annual report.
The list that cut ties with Silvergate includes Coinbase, Paxos, Galaxy Digital, Gemini, BitStamp, Crypto.com, and Circle. Furthermore, the most prominent bitcoin holder Microstrategy has also raised concern about its Silvergate loan as the bank is heading towards insolvency.
The series of partnership disengagements sparked after Silvergate stated that it might fail to survive the turmoil as the drastic sellout of assets wipes its capital. Due to this, the bank has also been unable to repay maturing loans.
Also Read: Lawsuit Filed Against Silvergate over FTX & Alameda Relations
On Wednesday, Silvergate informed the Security and Exchange Commission that it would miss the deadline, March 16, for the annual report, which is already delayed.
At the time of writing, Silvergate’s shares plunged by 57%.
After envisaging inevitable disruption in Silvergate, the crypto firms started issuing a statement to make distance from it and avoid damage.
Coinbase stated in a Twitter thread that it is terminating the transaction channel with Silvergate by citing “out of an abundance of caution”.
Paxos, a Stablecoin issuer, assured the community that it has no “material exposure to Silvergate.” For the safe side, Paxos has “discontinued all SEN transfers and wires to our Silvergate account.”
Apart from this, other crypto firms like Circle, Gemini, Binance, and others have issued a statement regarding the situation and cutting ties.
The biggest bitcoin holding firm, MicroStrategy, unveiled that they have a loan from Silvergate, which is due in the first quarter of 2025. However, it wouldn’t accelerate at all if Silvergate declared bankruptcy.
These cumulative efforts of crypto firms by cutting partnerships would help the crypto community to stop opening another chapter of the crypto downfall.
