Circle acknowledges concerns regarding Silvergate and Said We are currently in the process of notifying our customers and discontinuing certain services with them.

Circle, the issuer of stablecoin USDC, responded to ongoing FUD over its relationship with troubled cryptocurrency bank Silvergate in a tweet on March 2.

“We are sensitive to the concerns surrounding Silvergate and are in the process of rolling back certain services with them and informing customers.”

On March 2, the share price of Silvergate Capital, the parent company of Silvergate Bank, fell after the bank postponed the filing of its annual 10-K report while assessing recent events beyond the end of 2022. bottom.

The company, which provides banking solutions to cryptocurrency companies, experienced a 45% drop at the end of the day, up from 48.8% previously. As a result, his year-to-date losses widened to 57%.

In a statement issued Wednesday, Silvergate said the audit firm needed additional time to complete certain audit procedures, adding, “We are currently reviewing certain regulatory and other inquiries and investigations. I am doing.”

Since late last year, Silvergate has encountered multiple setbacks in the aftermath of the collapse of the FTX cryptocurrency exchange. In January, the bank experienced its 40% drop in just one day after revealing heavy withdrawals in the fourth quarter following the FTX collapse. Then, in February, the Justice Department launched an investigation into Silvergate’s dealings with FTX and its affiliate, Alameda Research.

Signature Bank, which also provides banking services to cryptocurrency startups, was adversely affected by the decline in Silvergate’s share price. Signature Bank’s stock hit a 52-week low during the day, before dropping another about 6%.

Coinbase’s stock price also fell by about 7% following the news.

In a statement, the cryptocurrency services company said its corporate exposure to Silvergate was minimal and it had stopped accepting or initiating payments to or from banks. Galaxy Digital and stablecoin issuers Circle and Paxos have taken the same step.

Circle maintains relationships with various banking partners, not just Silvergate, and said that “all Circle services, including USDC, are operating as normal.”

By Jules

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