Tag: Silvergate

Tech-weapons tycoons Palmer Luckey and Joe Lonsdale are funding Erebor Bank, a charter-in-progress that promises full-stack banking for crypto, AI, and defense startups—right when mainstream lenders still slam the door. We unpack the political tailwinds, regulatory minefields, and the hard numbers that could make—or break—this $2 billion moonshot.

In the FTX bankruptcy saga, three distinct groups have lodged competing claims over assets seized from former FTX CEO Sam Bankman-Fried (SBF) following his criminal conviction. In March, the Federal High Court's $11 billion forfeiture order included various properties such as crypto tokens, private jets, and bank funds. Now, the FTX debtors' estate, a class of creditors, and an offshore entity founded by SBF are all vying for control over these assets.

Binance, the world's largest crypto exchange with 128 million users, had to stop its GBP deposits and withdrawals. This comes a month after the world's largest crypto exchange ceased dollar transfers. This is because, Binance's partner for GBP deposits, FCA-regulated Paysafe, decided to stop offering Binance customers its embedded wallet solution in the UK in a move it blamed on complex regulation.

The narrative of the sudden death of U.S. banks Silvergate, Silicon Valley Bank, and most recently Signature Bank sounds like a complicated conspiracy story written by John Grisham, Ken Follet, or John Le Carre. The main character is Sam Bankman-Fried (SBF). He allegedly intentionally triggered the collapse of the Terra-Luna stablecoin scheme in 2022 and, with it, the implosion of the worldwide crypto scene, which finally also swept the banking scene, forcing states and regulators to intervene.

After a short period of weakness, the leading currencies of the crypto segment are unimpressed by the collapse of Silvergate and Silicon Valley Bank (SVB) last week. Both Californian banks were also of systemic importance for the crypto segment. Bitcoin briefly fell below the $20,000 mark last week but is again showing at the beginning of the week at well over $22,000. Similarly, Ether has risen more than 9% to over $1,600. This price hikes may be connected to hopes of a SVB bail-out.

Banking is becoming more difficult in the U.S. for crypto schemes. After Silvergate announced its voluntary liquidation, CoinDesk reported this morning that U.S. banking giant JPMorgan plans to end its banking relationship with crypto exchange Gemini owned by Winklevoss Twins, Cameron and Tyler. Back in early 2020, JPMorgan took on Gemini and Coinbase as customers. Gemini immediately denied the CoinDesk report on Twitter.

Some industry experts expected a bankruptcy filing! Instead, the California-based Silvergate Bank announced its intent to wind down operations and voluntarily liquidate the bank in an orderly manner. In the past few years, Silvergate became the largest crypto bank in the US, attracting as much as $14 billion in customer deposits and reaching a stock price of more than $200 in late 2021. All deposits will be fully repaid, according to a liquidation plan.

Dubai-based crypto exchange Bybit has suspended United States dollar deposits via bank transfers (including SWIFT) in response to “service outages from a partner,” the company announced via a blog post and on Twitter. However, customers can continue to deposit USD via the Advcash Wallet or buy cryptocurrencies with a credit card on ByBit's One-Click Buy page. Funds can be withdrawn through wire transfers until March 10. 

Silvergate Bank, a state-chartered bank specializing in providing financial infrastructure to the crypto industry, filed a WARN Act on job cuts that reduced its workforce by 40%, The San Diego Union Tribune reports. To reset its business after a massive run on deposits last quarter, crypto-bank Silvergate has slashed 181 jobs at its local headquarters. The bank was most recently in the spotlight during the collapse of the crypto exchange FTX, for which it handled extensive FIAT transactions.