Coinbase exchange has just announced that it will no longer use fiat withdrawals from Silvergate, especially after the bank’s recent controversies.
On its official Twitter, Coinbase said it will no longer use the deposit and withdrawal service from Silvergate bank. Specifically:
At Coinbase all client funds continue to be safe, accessible & available.
In light of recent developments & out of an abundance of caution, Coinbase is no longer accepting or initiating payments to or from Silvergate.
— Coinbase (@coinbase) March 2, 2023
“With Coinbase, your assets will always be safe and accessible at any time. Given recent considerations, Coinbase will no longer accept transactions to and from Silvergate Bank.”
Accordingly, this change will have scope in the USD market and not immediately affect the requirements to trade with Pound Sterling and Euro.
This statement comes in the context of Silvergate bank being entangled in many recent scandals. Especially the fact that this bank could not publish its financial statements on time to the SEC at the beginning of March 2023. The reason given by the bank for the delay was “the process of revaluation and the discovery of several new losses related to its securities portfolio”.
> See more: US investigates Silvergate “crypto bank” relationship with FTX
Silvergate keeps going; down 50% pre-market to new all-time low pic.twitter.com/pX8b5jYV6D
— db (@tier10k) March 2, 2023
The recent negative news could easily be directly reflected in the bank’s share price. Silvergate stock recently hit an all-time low as the market opened.
Back to Coinbase, the exchange is said to have sent an email to users of its Prime service, announcing a new banking partner that will accompany the exchange in the near future.
“Coinbase Prime has decided to change its USD deposit and withdrawal banking partner. We will assist with fiat deposits and withdrawals through Signature Bank. This decision will take effect immediately.”
This is not a hedging move by Coinbase. This week, the exchange announced that it would discontinue market support for BUSD due to regulatory and liquidity concerns from the stablecoin.