BlockFi bankruptcy: Silvergate had $20 million in crypto platform customer deposits.
reversal After BlockFi’s loan service was destroyed by the FTX explosion, Silvergate made a public release dispelling suspicions that it had significant exposure to the failed cryptocurrency lending company.
The collapse of BlockFi would not cause Silvergate to quake.
On the day of its announcement, November 28, Silvergate claimed that its exposure to BlockFi amounted to almost $20 million in customer deposits. This information was provided in a statement that was dated November 28. It was also made clear by the cryptocurrency bank that it does not have any investments in BlockFi.
In addition, BlockFi would not act as the custodian for Silvergate for the company’s secured leveraged loans in Bitcoin (BTC). Additionally, the cryptocurrency bank emphasized that these loans are “continuing to operate as designed with zero losses and no forced liquidation.”
In the wake of BlockFi’s filing for bankruptcy, Silvergate would like to reassure its user base. According to the news release, this disclosure was deemed necessary since the cryptocurrency bank may potentially become the target of “false and deceptive statements.”
Alan Lane, the CEO of Silvergate, goes so far as to declare that to prove that the company is capable of withstanding the current earthquakes that the FTX crisis has created, he is attempting to show that Silvergate is strong enough to:
“The platform that Silvergate uses was developed expressly to handle high levels of stress and volatility.”
The effects of the failure of FTX continue to be felt throughout the cryptocurrency sector. Companies are, on occasion, the subjects of rumors, which, taking into account the circumstances, might further undermine their standing. They too need to wage a counterattack in this communication battle, much like BlockFi.