Silvergate Crypto Crisis: How Safe Are Alternate US Banking Partners?
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Loading... - Ana Valenzuela
- 03 Mar 2023
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Silvergate Bank Crypto News: The crypto market saw the biggest shock event of the year 2023 so far with Silvergate Capital warning about its ability to operate in the current environment. The FTX related contagion clubbed with rising interest rates in recent months took a toll on the bank’s financial health. As the largest crypto banking partner in the US attracted FUD, cryptocurrency prices tanked with an inherent fear of further dip over the weekend. If the liquidity situation in the US doesn’t improve over the next few days, there is a danger of crypto crash as it appears to be difficult for companies to find a banking partner that supports digital assets related transactions.What Next For Crypto Firms In US?
Owing to stricter financial regulations in the country, crypto companies had in the recent past found it difficult to maintain working relationships with US based banking partners. While Silvergate’s woes from FTX contagion were already revealed, the larger picture about difficulty with crypto related banking activity in the US came out after top crypto exchange Binance spilled the beans. In first week of February 2023, it announced temporary suspension of deposits and withdrawals of US dollars using bank accounts
Hence, experts believe crypto firms could look for banking channel options in other countries, until the situation around crypto regulation in the US improves. Therefore, US based crypto companies could in the short term face liquidity issues and even worse, if traders undergo massive selloff as was seen at least twice in 2022, around Terra network collapse and the FTX liquidity crisis. Read More..
