Circle, the issuer of the stablecoin USDC, has provided its customers with information on the impact of the Silvergate crisis. The Silvergate Exchange Network (SEN) has been discontinued and Circle has turned to alternative service providers.
Circle has withdrawn a small percentage of its USD Coin (USDC) reserves held in Silvergate to other banking partners. Circle noted that Silvergate and its affiliated services are used by a small number of USDC customers. Circle also stated that it began “winding down” its relationship with Silvergate in 2022 “as signs of trouble and broader crypto asset risk exposure became increasingly apparent.”
What Happened?
Due to regulatory and other business-related difficulties, Silvergate Bank has announced that it is unable to submit its Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2022, to the Securities and Exchange Commission (SEC) by March 16. Following this announcement, Silvergate stock fell 57.7% on Thursday last week, and many crypto asset platforms cut ties with the bank. Circle has also announced on Twitter that it is unwinding certain services with Silvergate.
Silvergate used to provide banking services to several crypto firms, including Sam Bankman-Fried’s bankrupt FTX exchange. Last month, it was reported that Silvergate was being investigated by US prosecutors over its ties to FTX and its subsidiary Alameda Research.
