Coinbase Dumps Silvergate for Signature Bank

Coinbase has announced that it would drop its banking partner Silvergate, which is undergoing regulatory scrutiny and investigations regarding its ties to collapsed crypto exchange FTX.

The latest development comes shortly after Silvergate said it would delay its annual form 10-k filing with the United States Securities and Exchange Commission (SEC).

• In a tweet thread on Wednesday (March 2, 2023), Coinbase revealed that the company will no longer use Silvergate as a banking partner for its Coinbase Prime customers. The crypto exchange added that it has “de minimis corporate exposure to Silvergate.
• “In light of recent developments & out of an abundance of caution, Coinbase is no longer accepting or initiating payments to or from Silvergate.”

At Coinbase all client funds continue to be safe, accessible & available.

In light of recent developments & out of an abundance of caution, Coinbase is no longer accepting or initiating payments to or from Silvergate.

— Coinbase (@coinbase) March 2, 2023

• In a memo sent to Coinbase Prime Clients, the firm stated that the company was changing its USD banking partner to  Signature Bank “effective immediately.

“Coinbase Prime has elected to make changes to our USD banking partners. We are facilitating fiat withdrawals and deposits using Signature Bank, effective immediately. We are asking you to update your Coinbase Payment instructions to Signature Bank.”

• Coinbase becomes the latest crypto company to drop Silvergate for Signature Bank, after the crypto derivatives exchange LedgerX recently made a similar move.
• Meanwhile, the latest development comes on the heels of an earlier report where Silvergate told the SEC that it would delay the filing of its annual form 10-k report.
• The company, which recorded a net loss of nearly $1 billion in Q4 2022, said in its latest filing notice that it is expected to record further losses, which could make Silvergate Capital and its subsidiary, Silvergate Bank to be “less than well-capitalized.”