USDC stablecoin issuer Circle Internet Financial said on Twitter Friday that it is withdrawing from “certain services that involve” California-based cryptocurrency bank Silvergate Capital Corp., adding itself to the growing list of companies distancing themselves from the financially troubled U.S. bank .

See related article: Silvergate probed by US prosecutors over FTX, Alameda accounts: Bloomberg

Fast facts

  • Silvergate said in a filing Wednesday that it is not able to meet the March 16 deadline to file its annual 10-K report, which shows the financial performance of a publicly traded company, to the U.S. Securities and Exchange Commission, due to business and regulatory challenges. 
  • “A number of circumstances have occurred which will negatively impact the timing and the unaudited results previously reported in the Earnings Release, including the sale of additional investment securities beyond what was previously anticipated,” the filing said, adding that Silvergate could become “less than well-capitalized.”
  • Following the announcement, Silvergate stock plunged 57.7% on Thursday and global cryptocurrency firms, Coinbase, Gemini, and Galaxy Digital all cut business ties with Silvergate as a banking partner. 
  • The company posted a net loss of US$949 million for 2022, compared to a net income of US$75.5 million in the previous year, according to its earnings report released in January. The company attributed the losses to a “crisis of confidence” in the sector. 
  • Silvergate provided banking services to a slew of crypto companies, including Sam Bankman-Fried’s now bankrupt FTX exchange. Last month, Silvergate was reportedly probed by U.S. prosecutors for its dealings with FTX and its affiliated brokerage Alameda Research. 

See related article: Silvergate reports US$1 billion loss, attributes to “crisis of confidence” in crypto sector