Silvergate is struggling to stay afloat after the collapse of FTX. (file)
Shares of cryptocurrency-related companies fell in premarket trading on Monday after Silvergate Capital Corp pulled the plug on its crypto payments network, amid doubts about whether its business would remain viable.
The digital asset-focused bank said late Friday that it has made a “risk-based decision” to shut down the Silvergate Exchange Network (SEN) with immediate effect.
Shares of the La Jolla, California-based bank were down more than 4% in premarket trading, while crypto lending peer Signature Bank fell 3%. Crypto exchange Coinbase Global and BTC miner maker Ebang International were both down about 1% each.
“Crypto markets reacted negatively to Silvergate Bank news, with both Bitcoin and Ethereum down ~4.8% for the week,” analysts at brokerage Bernstein said in an industry note.
A slew of crypto heavyweights including Coinbase Global and Galaxy Digital have dropped Silvergate as their banking partner after the lender’s latest filing calls into question its ability to continue as a going concern.
Silvergate shares hit a record low of $4.86 on Friday, shedding nearly 98% of their value since their record close in November 2021 and wiping more than $7 billion off the company’s market capitalization.
The firm is struggling to stay afloat after the collapse of Sam Bankman-Fried’s crypto exchange, FTX, in November saw investors pull $8 billion in bank deposits in the last three months of the year.
Silvergate reported a net loss of $1 billion in the fourth quarter.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
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