{"id":561367,"date":"2023-03-09T09:00:57","date_gmt":"2023-03-09T06:00:57","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/silvergate-downfall-sparks-debate-over-whose-fault-it-actually-was\/"},"modified":"2023-03-09T09:00:57","modified_gmt":"2023-03-09T06:00:57","slug":"silvergate-downfall-sparks-debate-over-whose-fault-it-actually-was","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/silvergate-downfall-sparks-debate-over-whose-fault-it-actually-was\/","title":{"rendered":"# Silvergate downfall sparks debate over whose fault it actually was"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a2624516254e\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a2624516254e\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/silvergate-downfall-sparks-debate-over-whose-fault-it-actually-was\/#%E2%80%9D_Silvergate_downfall_sparks_debate_over_whose_fault_it_actually_was_%E2%80%9C\" >&#8221; Silvergate downfall sparks debate over whose fault it actually was &#8220;<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Silvergate_downfall_sparks_debate_over_whose_fault_it_actually_was_%E2%80%9C\"><\/span>&#8221; Silvergate downfall sparks debate over whose fault it actually was &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div class=\"post-content\" data-v-48054ca8>The voluntary liquidation of crypto-friendly bank Silvergate has sparked many to share their thoughts about the source of its troubles and the broader impact of the bank\u2019s collapse on crypto.\u00a0<\/p>\n<p>From lawmakers to crypto analysts, crypto firm executives to commentators \u2014 nearly everyone\u2019s had something to say regarding the recent announcement from Silvergate. <\/p>\n<p>Some United States lawmakers have used the moment to make a comment about the state of the crypto industry, labeling it a \u201crisky, volatile sector,\u201d which \u201cspreads risk across the financial system.\u201d <\/p>\n<p>Senator Elizabeth Warren called Silvergate\u2019s failure \u201cdis<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ointing, but predictable,\u201d calling for regulators to \u201cstep up against crypto risk.\u201d<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">As the bank of choice for crypto, Silvergate Bank&#8217;s failure is disappointing, but predictable. I warned of Silvergate&#8217;s risky, if not illegal, activity\u2014and identified severe due diligence failures. Now, customers must be made whole &amp; regulators should step up against crypto risk.<\/p>\n<p>\u2014 Elizabeth Warren (@SenWarren) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/SenWarren\/status\/1633611272372486144?ref_src=twsrc%5Etfw\">March 8, 2023<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>Senator Sherrod Brown also <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/leomschwartz\/status\/1633596709975609349\">chimed<\/a> in, sharing his concern that banks who get involved with crypto are putting the financial system at risk, and reaffirming his desire to \u201cestablish strong safeguards for our financial system from the risks of crypto.\u201d<\/p>\n<p>The senators\u2019 remarks have sparked criticism from the community, some of whom argue it was not a crypto problem and that fractional-reserve banking was to blame \u2014 as Silvergate held far more in-demand deposits compared to cash on hand.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">.<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/SenSherrodBrown?ref_src=twsrc%5Etfw\">@SenSherrodBrown<\/a>, you\u2019re wrong that <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/hashtag\/crypto?src=hash&amp;ref_src=twsrc%5Etfw\">#crypto<\/a> triggered Silvergate\u2019s issue. What did it was $13.3bn in demand deposits that depositors cld withdraw in minutes, but only $1.4bn of cash. Had <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/search?q=%24SI&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$SI<\/a> held $13.3bn of cash, the bank run wouldn\u2019t have impaired its capital. Not a crypto\u2026 <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/t.co\/nGlfHwUcBN\">https:\/\/t.co\/nGlfHwUcBN<\/a><\/p>\n<p>\u2014 Caitlin Long \u26a1\ufe0f (@CaitlinLong_) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/CaitlinLong_\/status\/1633608132713938945?ref_src=twsrc%5Etfw\">March 8, 2023<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>Several companies have instead used the recent announcement from Silvergate to reiterate their lack of or now-severed ties with the firm. <\/p>\n<p>Crypto exchange Binance\u2019s CEO Changpeng Zhao <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/cz_binance\/status\/1633657404389826562\">assured<\/a> customers on <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">Twitter<\/a> that they do not have assets stored with Silvergate, while peer exchange Coinbase has also assured its followers that no customer funds were held by the bank.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">Update: We\u2019re sorry to see Silvergate make the tough decision to wind down their operations. They were a partner &amp; contributors to the growth of the cryptoeconomy. Coinbase has no client or corporate cash at Silvergate. Client funds continue to be safe, accessible &amp; available. <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/t.co\/78oMrLQ6VH\">https:\/\/t.co\/78oMrLQ6VH<\/a><\/p>\n<p>\u2014 Coinbase (@coinbase) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/coinbase\/status\/1633631430097141761?ref_src=twsrc%5Etfw\">March 9, 2023<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>Meanwhile, Nic Carter, co-founder of venture firm Castle Island and crypto intelligence firm Coin Metrics suggested it was the government that \u201chastened the collapse\u201d of Silvergate by launching investigations and legal attacks on them. <\/p>\n<p>\u201cThey\u2019re the arsonist and the firefighter in one,\u201d he <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/nic__carter\/status\/1633598702014038017\">wrote<\/a>. <\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2023-03\/0ec3214d-0d52-4486-ba72-51848318acc8.png\"><\/figure>\n<p>The CEO of financial services firm Lumida \u2014 Ram Ahluwalia \u2014 had a similar take, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/ramahluwalia\/status\/1633669035924529152\">arguing<\/a> that Silvergate faced a bank run after a Senator\u2019s letter had undermined public trust in the firm, and that \u201csilvergate was denied due process.\u201d<\/p>\n<p><strong>Related: <\/strong><strong><em>Marathon Digital terminates credit facilities with Silvergate Bank<\/em><\/strong><\/p>\n<p>In an earlier blog post, Carter referred to \u201cOperation Choke Point 2.0\u201d as being underway, claiming that the U.S. government is using the banking sector to organize \u201ca sophisticated, widespread crackdown against the crypto industry.\u201d<\/p>\n<p>Others believe the collapse of Silvergate won\u2019t necessarily hurt the crypto industry, but it, along with proposed changes to tax laws, will exacerbate the exodus of crypto firms from the U.S.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">&#8211; Silvergate winding down operations in light of \u201cregulatory developments\u201d<br \/>&#8211; Proposed changes to capital gains<br \/>&#8211; Proposed elimination of tax loss harvesting <\/p>\n<p>none of these are bad for crypto\u2026<\/p>\n<p>they\u2019re just reasons for passionate builders to operate outside the US<\/p>\n<p>\u2014 Tom \ufe0f (@thomasjeans) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/thomasjeans\/status\/1633654466980225030?ref_src=twsrc%5Etfw\">March 9, 2023<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>With Silvergate winding down, some have also asked where crypto firms will turn to now.<\/p>\n<p>Coinbase, which previously accepted payments via Silvergate, announced on Mar. 3 that it will facilitate institutional client cash transactions for its prime customers with its other banking partner, Signature Bank.<\/p>\n<p>Signature Bank, however, announced in Dec. 2022 that it was intending to reduce its exposure to the crypto sector by reducing deposits from clients holding digital assets.<\/p>\n<p>To further reduce its crypto exposure, on Jan. 21 Signature imposed a minimum transaction limit of $100,000 on transactions it would process through the SWIFT payment system on behalf of crypto exchange Binance.<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/silvergate-downfall-sparks-debate-over-whose-fault-it-actually-was\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Silvergate downfall sparks debate over whose fault it actually was &#8220; The voluntary liquidation of crypto-friendly bank Silvergate has sparked many to share their thoughts about the source of its troubles and the broader impact of the bank\u2019s collapse on crypto.\u00a0 From lawmakers to crypto analysts, crypto firm executives to commentators \u2014 nearly everyone\u2019s&#8230;<\/p>\n","protected":false},"author":1,"featured_media":561368,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/cdn-cgi\/image\/format=auto,onerror=redirect,quality=90,width=1200\/https:\/\/s3.cointelegraph.com\/uploads\/2023-03\/28d7a9cc-70cf-41b0-a7a8-b15802eb0708.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[75014,77672,74956,82570,71939,117,70934,67874],"class_list":["post-561367","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-binance","tag-changpeng-zhao","tag-coinbase","tag-swift","tag-banks","tag-business","tag-regulation","tag-united-states"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/561367","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=561367"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/561367\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/561368"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=561367"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=561367"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=561367"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}