Friday marked the beginning of Silvergate’s suspension of its Silvergate Exchange Network due to what the company referred to as “a risk-based decision.”
The company’s credit rating was reduced by Moody’s for the second time in a span of less than two weeks, which resulted in the suspension of the network. When the firm delayed the submission of its annual report and after the company told the Securities and Exchange Commission that it was “less than well-capitalized,” Moody’s stated that it downgraded Silvergate due to insufficient capitalization and “governance problems.”
According to Silvergate’s information, other deposit-related services are operating as normal despite the fact that SEN has been terminated. Circle, Blockchain.com, Wintermute, GSR, Coinbase, and Paxos are just some of the big blockchain industry organizations that have cut their relations with Silvergate in recent months.
As specified and mandated in BlockFi’s bankruptcy, the bank just announced that it will also deliver $9.9 million to the financially troubled cryptocurrency lender BlockFi. According to its statement with the SEC, Silvergate is now dealing with a variety of problems, some of which include litigation, as well as regulatory and legislative investigation.