The crypto-friendly bank Silvergate has decided to voluntarily liquidate its operations, which has prompted many people to offer their ideas regarding the causes of the bank’s problems and the wider implications of the bank’s failure for cryptocurrencies.
Nearly everyone has an opinion on the latest declaration made by Silvergate, ranging from politicians and crypto experts to CEOs of crypto firms and pundits.
At this time, a number of lawmakers in the United States have used the opportunity to remark on the current state of the cryptocurrency business. They have referred to it as a “risky, volatile sector” that “spreads risk across the financial system.”
Elizabeth Warren, a senator from Massachusetts, said that the failure of Silvergate was “disappointing, but inevitable,” and she urged on regulators to “stand up against crypto risk.”
Senator Sherrod Brown stepped in as well, expressing his worry that financial institutions that become engaged with cryptocurrencies put the entire financial system at danger, and reiterating his wish to “create robust safeguards for our financial system from the hazards of cryptocurrencies.”
The remarks made by the senators have been met with backlash from the community. Some people in the community are of the opinion that the issue was not crypto-related and that fractional-reserve banking was to blame for the situation, given that Silvergate held a significantly larger number of deposits that were in demand than cash on hand.
Instead, a number of businesses have taken the opportunity presented by Silvergate’s most recent declaration to restate that they have never had or do not now have any links with the company in question. Although the CEO of the cryptocurrency exchange Binance, Changpeng Zhao, reassured clients on Twitter that they do not have any assets kept with Silvergate, the CEO of the peer-to-peer cryptocurrency exchange Coinbase similarly reassured its followers that the bank was not holding any customer cash.