Coinbase, a leading U.S.-based crypto exchange, announced it would drop its alliance with Silvergate, a crypto-focused bank. This makes matters worse for the bank, which saw its value plunge in after-hours trading yesterday. The bank announced that it would be delaying its annual report filing in its SEC report yesterday. In a Twitter thread, Coinbase said,
“At Coinbase all client funds continue to be safe, accessible & available. In light of recent developments & out of an abundance of caution, Coinbase is no longer accepting or initiating payments to or from Silvergate.”
Furthermore, the crypto-exchange stated that it would use “other banking partners” to provide services to its institutional clients. Coinbase also noted that the firm “has taken proactive action to help ensure that clients experience no impact from this change.” Moreover, the crypto exchange assured that it stores clients’ cash in FDIC-insured U.S. banks, adding that large dollar deposits are held in a U.S. government money market fund. Speaking about its exposure to the crypto-centric bank, Coinbase said,
“Coinbase has de minimis corporate exposure to Silvergate.”
The story is still developing.