Myriad Crypto 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.
Coinbase, Paxos, Galaxy Digital, Gemini, BitStamp, Crypto.com, and Circle are among of the companies on the list that have severed their relations with Silvergate. In addition, the most notable bitcoin holder, Microstrategy, has expressed anxiety over its Silvergate loan despite the fact that the bank is on the verge of failing to meet its financial obligations.
Once Silvergate announced that it would not be able to withstand the instability as the extreme selling of assets wipes away its money, a series of partnership disengagements were ignited. These disengagements were started. Because of this, the bank has also been unable to repay debts that have reached their maturity date.
On Wednesday, Silvergate warned the Securities and Exchange Commission that it would not be able to submit the annual report by the date of March 16, which is already behind schedule.
As of the time this article was written, Silvergate’s share price had fallen by 57%.
After realizing that Silvergate will inevitably cause disruption, the cryptocurrency companies began publishing a statement to separate themselves from the situation and protect themselves from any harm.
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.”
In addition to this, a number of other cryptocurrency companies, including Circle, Gemini, Binance, and others, have released statements on the incident and severed links with the exchange.
MicroStrategy, the company with the largest bitcoin holdings, just disclosed that they had a loan from Silvergate. The loan’s payment is due in the first quarter of 2025. On the other hand, if Silvergate filed for bankruptcy, there would be no acceleration at all.
These combined efforts of cryptocurrency enterprises to sever ties would assist the cryptocurrency community in preventing another chapter of the cryptocurrency market’s decline from being written.
Compiled by Coinbold