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On March 2, 2023, the cryptocurrency exchange Coinbase announced that, in light of recent developments, the company is “no longer accepting or initiating payments to or from Silvergate Bank.” The news follows the crypto bank’s delay of its annual 10-K filing with the U.S. Securities and Exchange Commission (SEC) and JPMorgan’s downgrade of the company’s shares from “neutral” to “underweight.”
Coinbase announced on Thursday that it is no longer accepting or initiating any payments to or from the crypto-friendly bank Silvergate. Recently, Silvergate delayed its 2022 fiscal year 10-K filing with the SEC, citing the need for more time to complete the filing. Following the delay, the financial institution JPMorgan downgraded the company’s stock from “neutral” to “underweight.”
Prior to the opening bell on Wall Street Thursday morning, Silvergate’s shares had slid 17.20% in value over the past five days. At 8:23 a.m. Eastern Time, Coinbase made its announcement. “At Coinbase, all client funds continue to be safe, accessible and available,” the company tweeted. “In light of recent developments and out of an abundance of caution, Coinbase is no longer accepting or initiating payments to or from Silvergate.”
While further noting that funds held at Coinbase are safe, the company added:
Coinbase has de minimis corporate exposure to Silvergate.
The JPMorgan downgrade and Coinbase announcement regarding Silvergate come amid reports that the crypto derivatives platform Ledgerx has informed customers that it is no longer working with Silvergate. The alleged email sent by Ledgerx to customers states that wire transfers will now be conducted through Signature Bank.
Although Ledgerx was once part of the FTX company, it is now one of the subsidiaries not involved in the FTX bankruptcy proceedings. Hours before the Coinbase announcement, CNBC reported that Silvergate’s stock was expected to be one of the most active during Thursday’s trading session.
