Binance, Coinbase, OKX Unaffected By Silvergate Capital’s Shutdown
The recent news of Silvergate Capital’s collapse has sent ripples of concern through the crypto community, with many fearing a domino effect in the wake of the FTX catastrophe. Silvergate Capital announced that it was closing the bank and liquidating it, which has led to a slew of reassurances from other cryptocurrency firms that they have not been impacted by the collapse.
JUST IN: #Binance CEO says they do not have any losses from Silvergate Capital shutdown, and all funds are safe.
— Watcher.Guru (@WatcherGuru) March 9, 2023
Reassurance on Silvergate Closure
Binance’s CEO Changpeng Zhao was quick to assure users that the world’s largest cryptocurrency exchange had no asset losses at Silvergate and that funds at the exchange were safe. Coinbase also denied having any client or corporate cash at the bank and expressed sadness at seeing a partner and contributor to the growth of the crypto economy make the tough decision to wind down their operations.
OKX’s President Hong Fang also affirmed that both corporate and customer funds were safe. However, Fang expressed concern that the Silvergate debacle could slow down the process of cryptocurrency adoption.
Price Dips after Liquidation
The downfall of Silvergate Capital has been linked to regulators by the Crypto Council for Innovation. The CEO of the council, Shelia Warren, expressed concerns that discouraging banks from providing deposit accounts only exacerbates the problem by creating fewer options for any one sector to obtain banking services.
While prominent firms in the cryptocurrency industry have claimed to be untethered by the collapse of Silvergate, fear continues to linger around the industry. The stock price of Silvergate Capital Corp dipped by 5.76% to a low of $4.91 following its latest announcement.
Stability Concerns in Crypto
The popularity of digital assets is growing by the day, but there are still limited banks that take cryptocurrency deposits. The collapse of Silvergate Capital has led to concerns that this could exacerbate the concentration risks that exist within the industry. The fallout from the FTX catastrophe and now the collapse of Silvergate Capital has highlighted the need for more stability and regulation within the cryptocurrency industry.
