The situation for the Silvergate Bank has been worsening in recent weeks. Despite the struggles and efforts, the bank has not been able to recover from the dire situation.
The bank has been facing a major financial crisis now that it has been losing its partners. There are also many speculations about the bank being on the verge of closing down in the upcoming days.
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According to many people from the cryptocurrency industry and other major banking institutions, the bank may go bankrupt.
Silvergate Bank is Facing a Major Crisis
The Silvergate Bank was one of the largest supporters and facilitators of the cryptocurrency industry. Over the years, the reputation of the bank has grown to be a major proponent of the cryptocurrency industry.
For years, cryptocurrency firms have gained the support and assistance of the Silvergate Bank. It built itself to be one of the largest lenders to cryptocurrency firms.
This is the reason why the bank had grown so big in the entire cryptocurrency industry. Unfortunately, the situation has worsened for Silvergate Bank in recent weeks.
Now the bank is facing a troublesome situation and there is no support coming in from the crypto industry.
The bank is now facing many controversies and there is a high possibility that it may end up filing for bankruptcy. The bank has been barred by regulators from facilitating cryptocurrency exchanges and firms.
Therefore, the major exchanges have started to withdraw from the bank and now, things are going south for the lender.
It was once among the most preferred banks in the cryptocurrency industry a few weeks back. The situation has now changed entirely and the bank is no longer profitable or beneficial for the cryptocurrency industry.
Silvergate Closes its Payments Network
Due to the recent crisis, Silvergate bank has been forced to make a decision about the “Silvergate Exchange Network”. The lending firm has announced the discontinuation of the particular network.
As per the latest reports, the bank has even made an announcement to confirm its decision of shutting down the particular service.
The officials at the Silvergate Bank announced that they have decommissioned the Silvergate Exchange Network (SEN) with immediate effect.
Following their decision, the users will no longer be able to interact with the particular utility. The firm has confirmed that the deposits that the users made into the particular protocol are still intact and active.
This means that the users will be able to withdraw the funds they had deposited into the Silvergate Exchange Network.
They will not face any issues pertaining to their deposits as the firm wants to ensure that the users are given their funds back.
Purpose of the SEN
Using the particular service, the users had the ability to transfer funds to cryptocurrency exchanges. They could carry out the transfers using the particular facility to the crypto exchanges at any given time and hour.
The service was available 24/7 and most of the banks offered this utility to their users, which they borrowed from the Silvergate Bank.
Following the bank’s decision, neither the banks nor the users will be able to interact with this utility. The main reason why it was used in abundance was the transaction speed and agility it offered.
The users could execute very fast transactions using the particular technology and its advanced features.
Just when most of the banks take days to process the bank wire transfers, the SEN offered swift transaction capabilities to the users.
Silvergate May Go Down
The bank recently came under great pressure after announcing that it was facing financial issues that were interrupting its operations.
As a result, the investors have started to withdraw from the bank, causing its shares to plummet by 30%. Many firms have already left its side that include Coinbase and Kraken.
If the platform ends up going bankrupt or collapsing, it may launch another major negative contagion in the crypto market.