Silvergate suspends Silvergate Exchange Network as company reels from crises

Quick Take

  • Silvergate’s Silvergate Exchange Network (SEN) will shut down as part of a “risk-based decision,” the company said.
  • Other deposit-related services will be unaffected by the shuttering of SEN, Silvergate said.

Silvergate suspended its Silvergate Exchange Network on Friday, the result of what it called “a risk-based decision.” 

The network shutdown comes after Moody's downgraded Silvergate's credit rating for the second time in less than two weeks. Moody’s said it downgraded Silvergate due to insufficient capitalization and “governance deficiencies” after the company delayed its annual report filing and following the company telling the Securities and Exchange Commission it was "less than well-capitalized."  

Although SEN is now shut down, other deposit-related services are unaffected, according to Silvergate.

A number of major blockchain industry companies, including Circle, Blockchain.com, Wintermute, GSR, Coinbase and Paxos, severed ties with Silvergate.

THE SCOOP

Keep up with the latest news, trends, charts and views on crypto and DeFi with a new biweekly newsletter from The Block's Frank Chaparro

By signing-up you agree to our Terms of Service and Privacy Policy
By signing-up you agree to our Terms of Service and Privacy Policy

The bank recently also will release $9.9 million to distressed crypto lender BlockFi, as stipulated and ordered in BlockFi's bankruptcy.

Silvergate now faces a number of issues, including litigation, as well as regulatory and congressional scrutiny, according to its SEC filing.


© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Jeremy Nation is a senior reporter at The Block covering the greater blockchain ecosystem. Prior to joining The Block, Jeremy worked as a product content specialist at Bullish and Block.one. He also served as a reporter for ETHNews. Follow him on Twitter @ETH_Nation.

Editor

To contact the editors of this story:
Madhu Unnikrishnan at
[email protected]
Colin Wilhelm at
[email protected]