What Happened on Mar. 3rd | Without Silvergate, What is the alternative?
Signature Bank, a federally regulated US bank that has been actively serving the crypto industry, become one of the few banks still standing after its competitor, Silvergate, faced significant stress due to its exposure to FTX.
While Silvergate struggles to keep its business up and running, Signature Bank is unexpectedly profitable for 2022, with earnings per share up 38% compared to 2021. Even as total deposits plummeted by $14.2 billion in the fourth quarter, cryptocurrency deposits fell by $7.4 billion.
Notable crypto companies, including LedgerX and Coinbase have diverted clients to Signature amid the ongoing uncertainty surrounding Silvergate.
However, Signature Bank is facing challenges of its own, as it is currently embroiled in a class-action lawsuit that accuses it of "substantially facilitating" the commingling of funds between FTX and its private trading firm Alameda Research, prompting increased regulatory scrutiny for the bank. Signature’s CEO said last December that the bank will reduce the share of crypto-related deposits to less than 15% of total deposits from the current 23%.
Biggest Gainers & Losers
Crypto Exchanges Not Necessarily Qualified Custodians, Says US SEC Chair Gensler: Crypto exchanges cannot be seen as qualified custodians, the US Securities and Exchange Commission (SEC) Chair Gary Gensler said on Thursday's Investor Advisory Committee meeting.
Crypto-Friendly Bank Silvergate: Losing Major Customers and Approaching Dangerous Leverage Levels: Silvergate Bank, a cryptocurrency-friendly and one of the core banks in the crypto industry that helps tie the traditional financial industry to the crypto world went into serious trouble.
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