Skip to content Skip to sidebar Skip to footer

Is Silvergate Going Bankrupt & Impacting Crypto.

When Silvergate postponed its financial report to the SEC, at that time the Cryptosphere thought that they would go bankrupt.


When Silvergate postponed its financial report to the SEC, at that time the Cryptosphere thought that they would go bankrupt.

You will definitely ask what crypto will experience the impact of the bankruptcy, the answer is, Everything.

This impact will also be experienced by bitcoin (BTC) Ethereum (ETH) and stablecoins (USDT, USDC). This impact will also be experienced by several companies that already use silvergate products.

Silvergate is a bank operating in the US that is based in providing financial services to cryptocurrency exchanges and institutional investors.

The bank has expanded its network to SEN (Silvergate Exchange Network) proprietary payments that can facilitate fiat currency transactions.

Even though silvergate does not have offers for cryptocurrency trading, silvergate has collaborated with several cryptocurrency exchanges and platforms that use SEN.

This is used by exchanges and platforms for transactions made using fiat currency.

Companies that use the SEN network and link directly to Silvergate include Coinbase, Binance.US, Bitstamp, Kraken and Gemini.

You need to know that having a direct relationship with Silvergate does not mean that cryptocurrency is directly related to the bank, it is only a partner for dealing with fiat currency transactions.

Cryptocurrencies that are related to Silvergate and are publicly known are Bitcoin, Ethereum, Litecoin, XRP, Bitcoin Cash, USD COin, Paxos Standard and Dollar Gemini.

Silvergate's products include a SEN Leverage product that allows proprietary traders to use bitcoins as collateral for loans they make.

This was done to be able to buy more bitcoins without having to worry about the funding problems they have, because of this facility.

Microstrategy and coinbase companies are already using SEN Leverage products to get loans in USD.

In this case, microstrategy has received a loan of 205 million USD since their cooperative partnership was carried out.

The bitcoins that are the collateral are not touched by silbergate, but are held and controlled by their own clients, for example Coinbase Custtoda in cold storage wallets.

Therefore, if Silvergate goes bankrupt, the existing debt will be transferred to another bank at the same time by the Silvergate client.

Therefore, if Silvergate Bank goes bankrupt, it will be difficult for several companies to obtain USD debts that have been carried out by Microstrategy and Coinbase.

To get a USD loan using bitcoin is something that has really been discovered and until now only Silvergate can guarantee this.

Because, so far, getting a USD loan can only be done using DeFi or commonly referred to as Decentralized Finance.

For example using the BASE network or via protocols such as synthetix and Ethereum layer-2.