The Biden Administration is eyeing Silvergate Capital after the La Jolla, California-based crypto bank issued a going concern warning and announced the shuttering of its exchange network last week.
In her Monday briefing, White House press secretary Karine Jean-Pierre said she would not comment on Silvergate specifically, but “We are aware of the situation and monitoring the reports.”
BITCOIN HITS TWO-WEEK LOW, SILVERGATE UNRAVELS
Jean-Pierre observed that Silvergate was the latest cryptocurrency company to experience significant issues. “In recent weeks, banking regulators have released guidelines on how banks should protect themselves from risks associated with crypto,” she said.
Last week, the parent of Silvergate Bank announced it would not timely file its annual financial report with the Securities and Exchange Commission.
Silvergate said it needed additional time to allow its outside auditors to complete certain procedures, including a review of unrecorded adjustments and the evaluation of the effectiveness of the company’s internal control over financial reporting.
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The company sold additional debt securities in January and February 2023 and expects to record further losses.
Silvergate said the losses could result in the bank being less than well-capitalized.
The company reported a fourth quarter net loss of $1 billion, compared to net income of $04.6 billion a year earlier.
FTX FALLOUT HITS SILVERGATE, BITCOIN
Silvergate’s going concern warning sent bitcoin to a two-week low.
A day later, some crypto companies — prompted by the news about the bank — started backing away from Silvergate.
Coinbase, for example, said it had stopped “accepting or initiating payments” to or from the bank “in light of recent developments & out of an abundance of caution.”
Paxos and Galaxy, among others, announced similar steps.
“As you know, this is a president that has repeatedly called on Congress to take action to protect everyday Americans from the risk posed by digital assets,” and he will continue to do so,” Jean-Pierre added.
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Additional reporting from Aislinn Murphy.