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The
digital assets-focused bank said late on Friday that effective
immediately it had made a "risk-based decision" to discontinue
the Silvergate Exchange Network (SEN).
Shares of the La Jolla, California-based bank were down more
than 4% in premarket trading, while crypto lending peer
Signature Bank fell 3%. Crypto exchange Coinbase Global and BTC
mining machine maker Ebang International were both down about 1%
each.
"The crypto market reacted to the negative news from Silvergate
Bank, with both Bitcoin and Ethereum down ~4.8% for the week,"
analysts at brokerage Bernstein said in an industry note.
A slew of crypto heavyweights including Coinbase Global and
Galaxy Digital have dropped Silvergate as their banking partner
after the lender's latest filing raised questions about its
ability to continue as a going concern.
Shares in Silvergate hit a record low of $4.86 on Friday,
shedding nearly 98% of their value since their record close in
November 2021 and wiping out more than $7 billion from the
company's market capitalization.
The firm has been struggling to stay afloat after the collapse
of Sam Bankman-Fried's crypto exchange, FTX, in November drove
investors to pull out $8 billion in deposits from the bank in
the last three months of the year.
Silvergate reported a net loss of $1 billion in the fourth
quarter.
(Reporting by Manya Saini in Bengaluru; Editing by Anil D'Silva)
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