Coinbase, a well-known crypto exchange, while referring to the ongoing investigation, declared terminating its collaboration with its USD banking partner Silvergate Bank. The crypto platform turned to Twitter to discuss this. It stated on Twitter that, keeping in view the recent developments as well as out of caution, the crypto platform has decided to terminate accepting or making payments from or to Silvergate.
Coinbase Declares that It Will Not Accept Payments Through Its Banking Partner Silvergate Bank
While discussing the cutting of ties with the California-based crypto banking institution, the crypto exchange also made another clarification. As per Coinbase, it will offer cash transfers for institutional clients through the rest of the banking collaborators of the platform. The exchange added that it had taken practical measures to guarantee that no impact would be experienced by the consumers as a result of this move.
The crypto exchange elaborated on this, saying that the cash of the consumers is kept at United States-based banking institutions that are insured by the FDIC. It mentioned that when the holdings of consumers get large in terms of the dollar, the crypto exchange shifts the respective funds into a US-based government-backed financial market fund. This is done to keep the cash liquid and safe.
To further assure the community about the safety of their funds, Coinbase published a blog post. The company mentioned in the post that no lending operations would be carried out in the case of the consumers’ assets unless they particularly direct the platform to do so. For the security of the respective funds and assets, the company disclosed that it is taking some additional moves.
Also read:According to the platform, it utilizes three classes of controls. The respective controls are administered by the risk committees and the finance team of the crypto exchange. The respective three control categories take into account records and books, business continuity, and risk management. In the category of records and books, the entity adequately segregates as well as isolates the accounts for the cash related to clients and corporate parties.
To deal with risk management, the firm asserted that it has procedures and policies in line with which the cash of the customers is deposited. In addition to this, the amount limit of cash to be deposited to every bank is also determined by the policies. Coinbase also specified that the platform regularly performs comprehensive reviews related to the counterparty risks, taking into account the banks utilized by it.
The blog post also touched on business continuity. The crypto exchange claimed that it has great faith in its banking collaborators. Apart from that, it also expressed having contingency plans as well as redundant payment bars to guarantee that it could keep on serving the customers. In the words of the crypto exchange, it will ensure that its clients can access their assets if some changes are witnessed.
Silvergate Bank Announces Delaying the Yearly Report Filing
On the other hand, Silvergate Bank is going through a hard time. It recently declared that the bank would delay the annual report submission. The bank, in its filing submitted with the SEC, noted that the platform was assessing its capability to endure the ongoing concerns; thus, the report filing is being delayed.
Moreover, the banking institution brought to the front that the company was reassessing its strategies and businesses while keeping in view the present regulatory and business-related challenges.
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