Leading cryptocurrency exchanges have moved to reassure their clients that they have not been affected by the collapse of Silvergate Capital, which recently announced that it was closing the bank and liquidating it.
The bank’s collapse is seen as another domino in the FTX catastrophe, which has led to concerns about the Silvergate contagion. However, quick reassurances from top exchanges have helped to mitigate any potential fallout on the broader crypto market.
Binance, Coinbase and OKX
Binance‘s CEO Changpeng Zhao tweeted that the world’s largest cryptocurrency exchange has no asset losses at Silvergate and that funds at the exchange are safe. Coinbase also denied having any client or corporate cash at the bank.
The exchange wrote: “Coinbase has no client or corporate cash at Silvergate. Client funds continue to be safe, accessible & available.”
Coinbase has also taken proactive action to ensure that clients experience no impact from this change by no longer accepting or initiating payments to or from Silvergate.
OKX’s President Hong Fang affirmed that both corporate and customer funds are safe. However, Fang believes that the whole Silvergate debacle would slow down the process of cryptocurrency adoption.
Nonetheless, the swift responses of these exchanges demonstrate the industry’s growing maturity and its increasing ability to handle crises.
Silvergate Bank was a vital cog in the industry’s ecosystem, serving as a fiat on-ramp for many businesses in the space. The bank’s credibility took a hit after it declared a $949 million loss in 2022, compared with a $76 million profit in 2021, and many companies cut ties with it. The bank’s plans to wind down operations will see all deposits repaid in full, according to reports.
Impact on the crypto market
The collapse of Silvergate Capital and concerns about a contagion effect have had an impact on the crypto market. Bitcoin, which had been hovering around the $22,000 mark, dipped below that level following the news.
The collapse of Silvergate Capital is a reminder that the crypto industry is still susceptible to crises. However, the quick responses from leading cryptocurrency firms to reassure their clients about the safety of their funds have helped to mitigate any potential fallout on the broader crypto market.
The importance of transparency and trust cannot be overstated, and the industry must continue to prioritize these values as it grows and matures.
