Silvergate suspends Silvergate Exchange Network as company reels from crises
Quick Take
- Silvergate’s Silvergate Exchange Network (SEN) will shut down as part of a “risk-based decision,” the company said.
- Other deposit-related services will be unaffected by the shuttering of SEN, Silvergate said.
Silvergate suspended its Silvergate Exchange Network on Friday, the result of what it called “a risk-based decision.”
The network shutdown comes after Moody's downgraded Silvergate's credit rating for the second time in less than two weeks. Moody’s said it downgraded Silvergate due to insufficient capitalization and “governance deficiencies” after the company delayed its annual report filing and following the company telling the Securities and Exchange Commission it was "less than well-capitalized."
Although SEN is now shut down, other deposit-related services are unaffected, according to Silvergate.
A number of major blockchain industry companies, including Circle, Blockchain.com, Wintermute, GSR, Coinbase and Paxos, severed ties with Silvergate.
The bank recently also will release $9.9 million to distressed crypto lender BlockFi, as stipulated and ordered in BlockFi's bankruptcy.
Silvergate now faces a number of issues, including litigation, as well as regulatory and congressional scrutiny, according to its SEC filing.
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