“US bank Silvergate hit with $8bn in crypto withdrawals”

TLDR: Customers of US bank Silvergate, which provides cryptocurrency services, have withdrawn over $8bn (£6.7bn) of their crypto-linked deposits in the final 3 months of 2022. The bank ha sold $5.2bn in assets to cover the cost and to not get liquidated.

During the crypto “peak” it tried to launch its own stablecoin, and acquired the tech behind Diem stablecoin.

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Customers of US bank Silvergate, which provides cryptocurrency services, have withdrawn over $8bn (£6.7bn) of their crypto-linked deposits.

Around two-thirds of the bank’s customers pulled their deposits in the final three months of 2022.

The bank has sold $5.2bn in assets to cover the cost and remain liquid.

It came as three US regulators warned banks that issuing or holding crypto was “highly likely to be inconsistent with safe and sound banking practices”.

Silvergate is a bank listed on the New York Stock Exchange, and is therefore regulated within the financial sector. It is one of a small handful of businesses within this sector that provides cryptocurrency services.

The withdrawals followed the collapse of the FTX crypto exchange, which was once valued at $32bn before its bankruptcy filing in November.

Former FTX boss Sam Bankman-Fried has pleaded not guilty to charges that he defrauded customers and investors. Prosecutors say as many as one million creditors may have lost their money.

The case has shaken the entire crypto industry, sparking bankruptcy filings at other firms and declines in crypto values.

Alan Lane, chief executive of Silvergate, said the bank was selling assets to cover the withdrawals by customers “in response to the rapid changes in the digital asset industry”.

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