Is the Silvergate ship sinking?
The largest crypto bank by market cap is on the brink of bankruptcy. Its clients are leaving in droves.
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Here's what's led us to draw this conclusion:
- Investors withdrew $8.1 billion from Silvergate after FTX, one of its clients, went bankrupt.
- The bank sold SBF's debt at a loss of $718 million.
- The Department of Justice has launched a probe into Silvergate's accounts tied to FTX/Alameda, and blocked the bank's operations.
- On March 2, the bank announced that it wouldn't be able to file its annual report with the SEC on time and needed more time to assess the scale of its losses.
- American traders began massively shorting Silvergate's shares.
- The bank's stock price quickly fell by 60%.
- Coinbase, Galaxy Digital, Gemini, Circle, Crypto com, and Paxos have officially announced that they're terminating their partnerships with Silvergate and withdrawing funds from their accounts.
It's not a pleasant sight to see long-standing clients bring down their bank.
SBF has triggered an uncontrolled reaction, and we're yet to see how it all ends.
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