Crypto bank Silvergate announced on March 3 that it was phasing out its crypto payment network, citing the termination as “a scam”. The move comes after the bank’s shares have fallen more than 59% over the past five days on bankruptcy fears.
“Silvergate Bank has made risk-based decisions. To terminate the Silvergate Exchange Network (SEN), all other deposit-related services remain operational.”
U.S. Judge Michael B. Kaplan said Silvergate must return the $9,850,000 deposited by BlockFi, according to the filing.Posted on the website of the BlockFi restructuring consultant. The court ordered the bank to immediately refund the money pursuant to an agreement between the two companies in November 2022.
BlockFi was one of the crypto firms hit by last year’s FTX meltdown, just like Silvergate, which had a liquidity crunch due to the crypto bear market before being hit by a number of outflows. The fourth quarter of 2022 led to a net loss of $1 billion.
In an effort to mitigate the impact of increased withdrawals, Silvergate reportedly borrowed $3.6 billion from the US Federal Home Loan Banks System (FHLB), a group of 11 regional banks across the United States. that provide financing to banks and other lenders
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