Mar 6 (Portal) – Shares of cryptocurrency-related companies fell in premarket trading on Monday after Silvergate Capital Corp (SI.N) pulled the plug on its crypto payments network amid doubts about its continued existence of his business.
The digital asset-focused bank said late Friday that it had made a “risk-based decision” to shut down the Silvergate Exchange Network (SEN), effective immediately.
Shares of the La Jolla, Calif.-based bank are down more than 4% in premarket trading, while crypto lender Signature Bank (SBNY.O) is down 3%. Crypto exchange Coinbase Global (COIN.O) and BTC mining equipment maker Ebang International both lost about 1%.
“The crypto market reacted to the negative news from Silvergate Bank, with both Bitcoin and Ethereum down ~4.8% this week,” analysts at brokerage firm Bernstein said in an industry note.
A number of crypto heavyweights, including Coinbase Global and Galaxy Digital, have dropped Silvergate as their banking partner after the lender’s recent filing raised questions about its ability to continue the business.
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Silvergate shares hit a record low of $4.86 on Friday, losing almost 98% of its value since its record close in November 2021 and wiping out more than $7 billion from the company’s market cap.
The company has been struggling to stay afloat after the collapse of Sam Bankman-Fried’s crypto exchange FTX in November prompted investors to withdraw $8 billion in deposits from the bank over the last three months of the year.
Silvergate reported a net loss of $1 billion in the fourth quarter.
Reporting by Manya Saini in Bengaluru; Edited by Anil D’Silva
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