The bank, known for its favor with the cryptocurrency market, is facing increasing trouble. This has not escaped the attention of White House officials. President Joe Biden is issuing instructions to take action.
The Biden administration is looking at Silvergate
According to White House press secretary Karine Jean-Pierre, representatives of the highest American authority are aware of the troubles facing the cryptocurrency industry. Moreover, President Joe Biden himself was said to have intervened, calling on Congress to take action on this aspect.
Monday’s press briefing shed much light on the White House’s involvement in Silvergate. Although Karine Jean-Pierre did not mention the bank by name, she pointed out that “many cryptocurrency companies have experienced significant problems in recent weeks.” She also pointed to statements by federal banking regulators about the risks that cryptocurrencies have the right to pose to both banks and financial institutions themselves. To quote her words:
“In recent weeks, banking regulators have issued guidance on how banks should protect themselves from the risks associated with cryptocurrencies.”
Moments later, she also drew attention to Joe Biden’s attitude and added:
“As you know, this is a president who has repeatedly called on Congress to take action to protect Americans from the risks associated with investing in digital assets, and will continue to do so.”
Silvergate limits the scope of its activities
The last few days have resulted in bank officials deciding to limit their offerings. Thus, the Silvergate Exchange Network (SEN) will be closed. This is an internal clearing tool that operates continuously seven days a week. It allows transactions to be made at times when all other banking entities are not operating. This includes weekends as well as holidays. The decision came shortly after news of the company’s annual report was released. The once unofficial announcements now make it official that the Bank is in very bad shape and that without a proper response from regulators, it may not survive.
Silvergate closely linked to the cryptocurrency market
It is no secret that Silvergate was one of the first banks to befriend the cryptocurrency industry. It thus provides a pathway for the flow of capital into the sector. Unfortunately, numerous troubles caused cryptocurrency partners to decide to disassociate themselves from this entity. This resulted in a cascading sell-off of AI shares, which we wrote about in last week’s article. You can learn more about the consequences of these declines, as well as the problems that may await the cryptocurrency market, by reading the material titled: “Does Silvergate pose a threat to the crypto market?”.