Key Takeaways
- MSTR adds that it will not have to pay back a loan from Silvergate until Q1 2025 and that bankruptcy wouldnโt accelerate the loan repayment.
- Tether CTO states his company has no exposure to Silvergate.
Business software company MicroStrategy(MSTR) states that it had no asset with crypto-focused bank Silveragte Cpiatl (SI). โOur bitcoin (BTC) collateral isnโt custodied with Silvergate and we have no other financial relationship with Silvergateโ, the Michael Saylor-founded firmโs official tweet reads
MSTRโs official statement comes amid Silveragte delaying the filing of its annual 10-K report triggering liquidity concerns. Shares of the crypto bankโs stock have already fallen over 55% in the last 24 hours.
The firm added that it will not have to pay back a loan from Silvergate until Q1 2025 and that bankruptcy or insolvency wouldnโt necessarily โaccelerateโ the loan repayment. Apart from MSTR, several other companies across the digital asset sector are also trying to distance itself from the bank. On March 2, Tetherโs Chief Technology Officer Paolo Ardoino said his company has no exposure to Silvergate.
Crypto exchange Coinbase also announced that it would no longer accept or initiate payments with Silvergate. Stablecoin issuers Paxos and Circle and Mike Novogratz’s Galaxy Digital have also decided to scale back their partnership with the digital asset bank.
Firms ending the partnership with Silvergate has put the bank in a much more dire state. The bankโs liquidity troubles spiked after the implosion of Sam Bankman Friedโs FTX in November. Silvergate is also now being probed by the United States Department of Justice which is investigating Silvergateโs hosting of accounts linked to former FTX CEO Sam Bankman-Friedโs businesses.
The bank also reported a net loss of $1 billion in the fourth quarter, after investors concerned by the collapse of FTX pulled out more than $8 billion in deposits in the last three months of 2022.
Silvergate had cut 40% of its staff and disclosed taking out billions of dollars in loans to prevent a liquidity crisis and bank run following the fall of the SBF empire. In late January, when suspending its dividends, the bank had claimed that it had a โcash position in excess of its digital asset customer-related deposits,โ at the time.