What does the Silvergate collapse mean for crypto?

The illness of crypto-friendly slope Silvergate volition likley person a important interaction connected the crypto ecosystem and its ties with the banking assemblage successful the U.S. 

Earlier this week, the genitor institution of Silvergate Bank announced plans to upwind down operations and liquidate the bank. The announcement came aft the crypto-friendly slope had suffered 1$ cardinal worthy of losses successful the past 4th of 2022 arsenic a nonstop effect of the illness of crypto speech FTX, 1 of Silvergate’s main clients.

Silvergate was 1 of the precise fewer regulated fiscal institutions providing banking services to crypto companies and exchanges. Its downfall volition apt reenforce U.S. regulators' arguments that crypto poses a menace to the accepted fiscal system.

Earlier this year, the U.S. banking regulators had already issued a connection successful which they warned banks astir the risks of serving crypto-related companies. 

But crypto manufacture leaders spoke retired against this assessement, pointing retired that the clang of Silvergate was much a origin of classical banking risk, alternatively than of its vulnerability to crypto assets.

As Caitlin Long, CEO & Founder of Custodia Bank explained, if the slope held capable currency successful its deposits to conscionable customers' withdrawa request, it would person survived the slope tally without impairing its capitalization. 

Find retired much astir the causes and consequences of the Silvergate meltdown, cheque retired our latest Cointelegraph Report and subscribe to our YouTube channel.