The crypto-focused bank Silvergate Capital (SI:NYE) has stated that it will suspend its crypto payments platform, Silvergate Exchange Network (SEN). This decision was made after the bank expressed worries about its viability as a going business. During the year, the SEN platform lets the bank’s cryptocurrency and institutional investor clients to move funds between their accounts and those of other Silvergate clients.
Silvergate Capital has suffered a significant setback in the previous week, as Silvergate stock price has dropped by around 63% in the last two trading days. This followed the company’s announcement that it would delay filing its annual report while it examined its viability. The bank’s capital levels were affected by a loss incurred in the sale of new debt instruments earlier this year, which contributed to the delay. In addition, financial authorities and the U.S. Department of Justice are conducting investigations into Silvergate.
Several crypto organizations, including Coinbase Global (COIN:NSD), Galaxy Digital, and Paxos Trust Company, have ceased accepting or initiating payments through Silvergate in response to the report.
In the wake of the demise of the FTX exchange less than four months ago, the crypto community confronts the possibility of another big corporation failing. The consensus rating on Wall Street for Silvergate stock is Hold, based on one Buy, seven Hold, and three Sell opinions. The average price objective of $16.20 suggests a potential upside of 114.9%.