Silvergate, the cryptocurrency bank, collapses on the stock market

Silvergate

, the bank that big companies in the world of cryptocurrencies often turn to to carry out their operations with conventional money, has collapsed on the stock market.

In a historic day in the market,

The California-based firm has asked the SEC (the commission that regulates the financial market in the US) for a two-week extension of the deadline to complete the audit of its fiscal balance sheet for 2022, explaining that it could have

in recent months.

In his statement, he also acknowledged that, due to his situation, he has become the

"We are analyzing the impact that these investigations and new regulations may have in our business", they explain in the text.

The financial results of the last year, still pending this audit, have been disastrous.

Silvergate has closed 2022 with

, and there are reasons to doubt the viability of the firm in the short term.

Key player in the crypto world

The bank is a key player in the crypto world.

When an investor needs to transform their

, for example, into conventional money, they generally resort to an exchange, which is a service for buying and selling this type of asset.

But the money he receives obviously doesn't come out of thin air.

These exchanges use conventional banks to save and invest their reserves of dollars or euros, or to request loans with which to deal with these operations.

Silvergate is the largest of these traditional banks with an affinity for the cryptocurrency sector

, considered too risky by other financial institutions.

The risk is undoubtedly real.

Over the last year, a series of scams and scandals -such as the bankruptcy of FTX or the fall of the investment fund Three Arrows Capital- has turned the sector upside down, sinking the value of cryptocurrencies such as Bitcoin or Solana.

Since many of the projects in cryptocurrencies are financed or supported with this same type of assets,

, and it is affecting firms that until recently were considered solvent.

Silvergate is the last piece to fall on a board where few are left standing.

It is difficult to predict the effect that the collapse of Silvergate will have.

Exchanges such as

have stopped using their services after the solvency problems were known.

"In light of what happened and out of an abundance of caution, we no longer accept or initiate payments from Silvergate and will facilitate cash transactions for institutional clients with other banking partners," they explain from Coinbase.

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