Silvergate shares tank 46% after Coinbase severed payment partnership Silvergate shares tank 46% after Coinbase severed payment partnership
Coinbase has dropped Silvergate as its payment partner; urges Prime users to update their payment instructions to Signature Bank.
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Updated: Mar. 2, 2023 at 8:50 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Crypto-friendly bank Silvergate has seen its shares (SI) fall by over 44% shortly after news emerged that Coinbase will stop using its USD payment service.
Leading crypto exchange Coinbase informed its Primer users on March 2 that it has decided to change Silvergate as its banking partner.
Coinbase said it has moved to work with Signature bank for all USD-related payments.
“We are facilitating fiat withdrawals and deposits using Signature Bank, effective immediately” Coinbase said.
Coinbase has urged its Prime users to update their payment instructions to reflect Signature Bank details.
According to Coinbase, the update will not affect users’ crypto holdings or trading experience on Coinbase Prime.
Coinbase’s move to severe banking relationships with Silvergate may be linked to an ongoing investigation by U.S. authorities.
Trouble in Silvergate
In the wake of the FTX collapse, the U.S. Department of Justice moved to probe Silvergate for its alleged role in the FTX fallout.
Several U.S. senators had accused Silvergate of conducting business deals with FTX, despite having knowledge of the exchange’s mismanagement of customers’ funds.
At the end of the fourth quarter of 2022, Silvergate reportedly lost over $1 billion due to a sustained decrease in digital asset customers.
In addition, Silvergate failed to submit its annual 10-K report to the U.S. Securities and Exchange Commission (SEC) on March 1. As a result, the company’s share lost over 32% of its value to trade at $9.14.
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Christian Nwobodo
Christian is a crypto-curious nerd who loves to investigate how protocols work under the hood. Christian is interested in DeFi protocol research, token economics, and on-chain analytics.
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Coinbase
Coinbase is a digital currency exchange and wallet service that allows individuals to buy, sell, and store digital currencies, such as Bitcoin, Ethereum, and Litecoin.
Silvergate
Silvergate is a Federal Reserve member bank and the leading provider of innovative financial infrastructure solutions and services for the growing digital currency industry, based in La Jolla, California.