Cryptocurrency heavyweights including Coinbase Global Inc and Galaxy Digital on Thursday dropped Silvergate Capital Corp as their banking partner after the lender's latest filing raised questions about its ability to stay in business.
"It is now getting increasingly difficult for crypto companies to establish or sustain relationships with a U.S. bank," said Ivan Kachkovski, FX and crypto strategist at UBS.
Silvergate, one of the most influential banks in the digital asset industry, has drawn the ire of lawmakers in the United States over its dealings with FTX and Alameda.to Silvergate, asking for details of the bank's risk management practices and alleging its due diligence processes "failed miserably."
Silvergate was founded in 1988 and ventured into crypto in 2013. After high interest rates and the bankruptcy of FTX rattled crypto markets last year, the company reported a loss of $1 billion for the fourth quarter and slashed head count by 40% in a bid to cut costs.
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