Key Points:
- Coinbase revealed that Silvergate Bank was no longer its partner for US dollar banking.
- With their other banking partner, Signature Bank, Prime clients will be able to conduct institutional client cash transactions thanks to the cryptocurrency exchange.
- Moreover, the exchange stated that it would work with its other banking partners to assist institutional customer cash transfers.
When struggling cryptocurrency bank Silvergate revealed yesterday that it is having capitalization problems and is reevaluating its operations, Coinbase stated it no longer utilizes Silvergate to handle dollar payments for its top clients.
In a tweet, Coinbase stated that it left Silvergate Bank out of an excess of caution and that it still had little exposure to the bank focused on cryptocurrencies.
“In light of recent developments & out of an abundance of caution, Coinbase is no longer accepting or initiating payments to or from Silvergate & will be facilitating institutional client cash transactions with our other banking partners,” the company said.
The fintech and cryptocurrency bank Silvergate said that it would not be able to submit its annual financial report on time. It stated that more losses associated with the other-than-temporary impairment on the securities portfolio were anticipated to be recorded.
The bank stated that it does not believe it will be able to submit all the necessary data by March 16 for the report that is due for the fiscal year that ended on December 31.
Within hours, the revelation caused its stock price to drop 10% on worries that the bank wouldn’t be able to continue as a going concern. In pre-market trading, shares of Silvergate reached a record low.
According to a client email, Coinbase also embraced Signature Bank for its Prime users. Moreover, it declared that it would work with its other banking partners to facilitate cash transfers for institutional clients. The modification is applicable only to banking in US dollars and takes immediate effect. Payment instructions in pounds or euros are unaffected.
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Source: https://news.coincu.com/170951-coinbase-terminated-with-silvergate/
