#ForexChief #Silvergate #MarkKohodes #market #forexnews #stocks #worldnews #Coinbase #nyse⠀
🥊 Collapse of Silvergate: who is to blame and what to do
⠀
💵 A fresh crypto catastrophe is developing according to the standard scenario. Silvergate Bank announced the termination of its payment Silvergate Exchange Network. It is stated that other services related to deposits continue to work, but you should not believe this information.
⠀
Silvergate (NYSE: SI) was one of the first in the US to provide full-fledged banking services to crypto clients, in particular, deposits, lending, and liquidity provision. As a former head of FTX Sam Bankman-Fried said: «The life of crypto firms can be divided into “before” and “after” Silvergate».
⠀
On March 1, Silvergate notified the SEC of a delay in reporting for the past fiscal year due to problems with an accurate loss estimate. It is assumed that the real level of capitalization of the bank may be reduced to critical. All this may lead to the inability of the company to continue operations within 12 months after the publication of the report.
⠀
Alas, it was the collapse of FTX that created a $1 billion deficit in Silvergate's balance sheet, and regulators launched pre-trial checks due to the bank's possible involvement in fraud with crypto exchange client funds. The current capitalization of the bank fell by 48.82%. Moody's downgraded his rating from «Ba3» to «B2».
⠀
On March 3, private trader Mark Kohodes tweeted photos of the company's supposedly abandoned office.
⠀
Coinbase, Circle, Paxos, Galaxy Digital, Bitstamp, Wintermute, and Gemini reported the termination of relationships and the inability to conduct transactions to/from Silvergate. BTC reacted with a sharp 5% decline. due to which the leading crypto assets are also falling.
⠀
The crisis at Silvergate comes amid a tightening of crypto sector operating conditions by the Biden administration’s oversight bodies, with a potential shutdown of banking services.
⠀
Let's see what happens.
⠀
P.S. Speculators are trying to catch new lows in BTC, but we do not risk playing with such a high risk.
⠀
Profits to y’all!