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Crypto Stakeholders Say No Exposure to Shuttered Silvergate

Companies dealing in cryptocurrencies are rushing to convince investors that they do not have any corporate cash remaining at Silvergate Bank, which only just made the announcement that it is in the process of winding down its activities through the use of voluntary liquidation.

The chief executive officer of Binance, Changpeng Zhao, stated in a tweet that his company’s exchange does not hold any funds at Silvergate. Coinbase also stated that it does “not keep customer or business cash at Silvergate.” OKX President Hong Fang stated that the “company and consumer monies” are secure within the exchange.

Paxos, a business that provides cryptographic infrastructure, issued a statement claiming that the company “had almost little exposure to Silvergate.”

According to a statement that was sent to CoinDesk by a spokesman through email, “Last week we terminated SEN connection and wiring into our Silvergate account. Nevertheless, we have been processing outbound withdrawals.” “Since Paxos is a licensed institution, we have always placed a priority on the safety of our clients’ cash, and as a result, banking redundancy is included into our platform.”

In the meanwhile, the Crypto Council for Innovation pointed the finger of blame at an unduly exposed bank for the failure of Silvergate and urged authorities to loosen restrictions on the number of banks that may accept cryptocurrency deposits.

“By discouraging banks from providing deposit accounts, we are just contributing to the worsening of this situation by reducing the number of available alternatives for any particular sector to get banking services.” “The issue is not crypto itself; rather, it is concentration hazards,” Shelia Warren, the chief executive officer of the council, said in a statement.

“I hope that this situation serves as a needed reminder to regulators of the risk of concentration, which is certainly not unique to the cryptocurrency industry, and will cause them to encourage responsible distribution across the banking sector,” she wrote. “The risk of concentration is certainly not unique to the cryptocurrency industry.”

Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Crypto is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Crypto market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.