Silvergate In Real Crisis - Bankruptcy Looms

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The financial world is such that it doesn’t forgive anyone. Make a mistake and you’re in a big trouble. This is same with crypto especially with the market volatility which calls for more care and caution. The number of crypto scams is still worrying and the wrong move with one or more can give you serious problems. A wrong investment means a lot of trouble and we have seen a lot of such cases.

Most of us know about FTX’s fall and maybe the reasons.FTX fell big and its effects are still being felt. But, just a summary for those who are not very sure how FTX one of the biggest crypto exchanges crumbled, it happened due to their token FTT, ties with Alamenda where they thought the money accumulated for over 3 years and not running FTX well. Basically the running of FTT was a mess. Alemanda used FTTs funds to make bets and take loans which in the long run didn’t make profits. To read more on why FTX collapsed, check this website.

Silvergate’s bankruptcy is due to Alamenda and FTX filing for bankruptcy and Silvergate having to sell of their assets to pay off their customers. It has taken a big toll on the finances of Silvergate.

Silvergate has seen their shares drop a further 30% and have since warned their customers it might no longer be in this business this year. The Securities and Exchanges Comminsion (SEC) have been made aware by Silvergate Capital they wouldn’t be able to file their report on their financial doings and activities on time due to a number of reasons. This is called the 10-K form.

The company has to evaluate the amount of loss they have incurred and the ones they are yet to make due to further drops in the prices of their shares. The shares have plunged from $13.60 to $9.50 at the time of writing.

A number of firms have cut ties with Silvergate due to this and others have placed bets on their demise. A notable exchange to have done this is the crypto ledger X platform. Ledge X will begin using Signature bank for its transactions instead.

Bets have been placed on Silver gate going under and a notable one is that of billionaire George Soros the Hungarian-American business man who owns double eagle hedge fund now know as quantum fund. The price of the placed bet hasn’t been disclosed but it is believed George Soros has placed a bet for when Silvergate goes down.

At this point it’s pretty obvious Silvergate will go down and although that speaks bad about crypto exchanges, it gives other exchanges the chance to try and take their customers.

I am tempted to ask if exchanges and crypto related platforms are becoming negligent and not managing their finances rightly because this is the second time I have read about a crypto platform going down.

It was about 3AC NFTs on the verge of sales by liquidators and now this about Silvergate. What’s happening?

Let’s try as much as possible to be cautious with our funds and try to verify and do things the right way.

Thank you.