Silvergate struggled to stay afloat after FTX collapsed. (File)
Shares of cryptocurrency-related companies fell in early trading on Monday after Silvergate Capital Corp pulled the plug on its cryptocurrency payments network after raising doubts about the viability of its business.
The digital asset-focused bank said late on Friday that a “risk-based decision” to suspend Silvergate Exchange Network (SEN) had been made with immediate effect.
Shares of the La Jolla, California-based bank fell more than 4% in premarket trading, while fellow crypto-lending firm Signature Bank fell 3%. Crypto exchange Coinbase Global and BTC mining machine maker Ebang International each fell about 1%.
“Crypto markets responded to negative news from Silvergate Bank, with Bitcoin and Ethereum down ~4.8% for the week,” analysts at brokerage Bernstein said in an industry note.
A number of cryptocurrency companies, including Coinbase Global and Galaxy Digital, dropped Silvergate as a banking partner after the lender’s latest filing raised questions about its ability to continue as a going concern.
Shares of Silvergate 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 struggled to survive after the collapse of Sam Bankman-Fried’s FTX cryptocurrency exchange in November, prompting investors to withdraw $8 billion in deposits from the bank 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 was not edited by NDTV staff and was published on a syndicated channel.)
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