Following the announcement by FalconX, the crypto trading platform, that it would be quitting the services of the Silvergate Exchange Network, the crypto exchange firm has made a turnaround and announced that it would pick up using Silvergate’s payment system once again.
Silvergate’s Payment Network Is Once Again Utilised by FalconX.
One of the numerous aftermaths of the quite drastic fall of FTX in the crypto industry is that it frustrated a couple of existing relationships and partnerships between crypto firms. One such instance is the case of FalconX and Silvergate.
Since the eventful FTX collapse, the shares of Silvergate Capital (SI) have continued to fall sporadically, and not even the assuring words of Alan Lane have been enough to allay the fears of the investors.
On Thursday, the 17th of November, CEO Lane released a statement claiming that the firm has an abundance of capital ratios and liquidity to manage volatility.
However, that did not successfully take the worries of investors away and manage the situation, as the shares suffered a more brutal fall of 10% on Friday the next day.
Also read:It was after the address of CEO Lane that FalconX made public its intention to stop using Silvergate Capital for its payment needs.
Prior to that time, the crypto trading platform FalconX had been employing the Silvergate SEN Leverage to trade its assets on-platform.
According to FalconX, it was pausing the usage of Silvergate for security reasons and to exercise the necessary caution given the deplorable state of the crypto industry.
And as expected, the shares of Silvergate Capital (SI) took a plummet again just after the announcement of FalconX.
Therefore, it came as a surprise when FalconX made a turnaround on its decision and announced the resume of its already deserted situation with Silvergate.
According to the spokesperson, the company has completed the necessary checks and has deemed it fit to continue using Silvergate’s payment system.
Is Silvergate Free Of Risk?
Following the questions of the investors and spectators in the crypto industry, Silvergate Capital has debunked the rumours that it had any link or outstanding debt with the collapsed FTX.
The bank clarified that although the collapsed exchange had about $1 billion in deposits with Silvergate, that amount is barely 10% of the bank’s total deposits, therefore investors have nothing to worry about.
Given the new turnout of events, it appears that things are gradually looking up for Silvergate Capital.
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