Silvergate Capital Reveals its Exposure to Bankrupt Crypto Lender BlockFi
Silvergate Capital Corporation – a digital asset bank based in California – revealed its deposit relationship to the troubled crypto firm BlockFi was limited to less than $20 million of its total deposits.
The latter filed for Chapter 11 bankruptcy protection in the United States earlier this week, becoming the next leading company in the crypto space to do so.
- In a recent statement, Silvergate explained that BlockFi is not a custodian for the bank’s bitcoin-collateralized SEN Leverage loans.
- The California-headquartered firm assured it has no investments in the distressed crypto lender and said its loans continue to perform with “zero losses and no forced liquidations.”
- Silvergate’s financial relationship with BlockFi was limited to less than $20 million of its total client deposits.
- CEO Alan Lane outlined that the banks’ platform was designed to “manage stress and volatility.”
“The SEN continues to operate as designed, and our support teams are available 24 hours a day, 7 days a week to help our customers during this period of adversity,” he added.
- Recent rumors hinted that the digital asset bank had lent funds to BlockFi. Silvergate dismissed the speculation, saying it has been the subject of “false and misleading statements.”
- BlockFi has been coping with severe issues throughout 2022 due to the ongoing bear market. FTX provided a $400 million loan to the company and was close to purchasing it in July.
- Nonetheless, the collapse of SBF’s crypto giant intensified BlockFi’s problems, and it filed for bankruptcy protection.
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