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Silvergate confirms minimal exposure to BlockFi, the latest victim of FTX contagion

Silvergate was rumoured to be battling the contagion FUD of FTX since early November

Shashank Bhardwaj
Published: Nov 29, 2022 01:48:53 PM IST
Updated: Nov 29, 2022 02:27:19 PM IST

Silvergate confirms minimal exposure to BlockFi, the latest victim of FTX contagionImage: Shutterstock

Silvergate Capital Corporation, the leading digital assets bank providing innovative financial infrastructure solutions to companies around the world with its real-time payments platform SEN at its heart, confirmed its minimal exposure to BlockFi on Monday after BlockFi filed for chapter 11 bankruptcy protection, becoming the biggest victim of FTX contagion after the recent fall of FTX.

Silvergate said that BlockFi crypto lending firm is not a custodian of its Bitcoin-collateralized leverage loans, which haven't faced any loss or forced liquidations to date, and as of November 28 2022, Its deposit relationship with BlockFi is limited to less than $20 million of its total deposits from all digital assets customers which stood at $13.2 billion in Q3'22. The firm also added that it has no investment in BlockFi.

Silvergate has been getting a lot of heat from investors and the general public alike lately and has been under a lot of FUD (fear, uncertainty, and doubt), with a whole lot of tweets adding to the fire over the last week. However, most of them seem to be bogus.

"As the digital asset industry continues to transform, I want to reiterate that Silvergate's platform was purpose-built to manage stress and volatility,' Silvergate CEO Alan Lane said to reassure investors. 'The SEN continues to operate as designed, and our support teams are available 24 hours a day, seven days a week to help our customers during this period of adversity," he added.

There has been a lot of speculation regarding Silvergate on the internet lately, with some speculating that Silvergate Capital has lent money to BlockFi, but so far, no conclusive evidence has emerged regarding their relationship with BlockFi other than what's already stated above.

According to BlockFi's bankruptcy filing, it has over 100,000 creditors and assets in the range of $1 billion to $10 billion, while liabilities are in a similar range.

Silvergate Capital Corporation was rumoured to be battling the contagion fears of FTX since early November but has refuted that the recent FUD has anything to do with the fall of FTX. As it is with most crypto companies, Silvergate's stock prices have plummeted by 83.6 per cent this year.

Shashank is founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist.

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