Silvergate Capital has been quick to distance itself from the now-bankrupt crypto lender BlockFi.
Institutional crypto services provider Silvergate Capital has confirmed its minimal exposure to the embattled BlockFi crypto lending firm.
On Nov. 28, Silvergate announced that its deposit relationship with BlockFi is “limited to less than $20 million of its total deposits from all digital asset customers.” Those deposits totaled $13.2 billion in Q3 according to the firm’s revenue report.
It added that BlockFi was not a custodian for its Bitcoin-collateralized leverage loans and the firm has no investments in BlockFi.
To quell investor jitters, Silvergate CEO Alan Lane said, “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 Provides Statement on Minimal Exposure to BlockFi https://t.co/FoBqzylpr6
— Silvergate Bank (@silvergatebank) November 28, 2022
Silvergate has been the subject of a lot of FUD (fear, uncertainty, and doubt), or “false and misleading statements,” in its words.
On Nov. 29, technical analyst and Swiss investor Walter Bloomberg told his 622K Twitter followers “Silvergate Capital said to have lent money to BlockFi,” but failed to provide any evidence.
Others have added to the FUD fest with several Tweets over the past week, however, most of them were lacking specifics.
On Nov. 28 Cointelegraph reported that BlockFi had become the latest victim of the FTX contagion to file for Chapter 11 bankruptcy.
The filing stated that BlockFi has more than 100,000 creditors, assets between $1 billion and $10 billion, and similar liabilities. The latest high-profile crypto bankruptcy appears to have fuelled this recent round of FUD, which Silvergate has seen fit to refute.
Related: Silvergate Capital’s crypto-to-fiat transfers decrease by $50B compared with Q3 2021
Earlier this month, the WSJ ran an article on Silvergate claiming that the company was battling the contagion fears. The crypto bank has seen its stock prices plunge this year but that has been the case for most publically listed crypto companies.
SI prices declined 11.1% on the day to finish at $24.45 in after-hours trading according to Market Watch. Silvergate stock has slumped 83.6% since the beginning of the year.
On Nov. 23, Cointelegraph reported that Block.one CEO, Brendan Blumer, had purchased a stake in Silvergate Capital.
