Understanding the new FUD in Crypto, a possible complete failure of Silvergate and their tie to Market Makers and Top Exchanges.

Silvergate is a bank that has been working with the crypto industry since 2013, focusing on relationships with Exchanges and Market movers.

Silvergate Capital (“Silvergate”) is the parent company of Silvergate Bank, the leading provider of innovative financial infrastructure solutions and services to participants in the digital asset industry. Silvergate is a California state-chartered bank, headquartered in San Diego. We began pursuing digital asset customers in 2013 and have been deliberate in our approach to serving this community since then. Source

Following the collapse of FTX, they experience a huge run on assets - they attempted to stay afloat by selling off their assets at a huge discount. Which effectively wiped out a decade of profit for the company.

Silvergate already reported a $1 billion loss in the fourth quarter, wiping away most of a decade’s worth of profit, as it was forced to sell assets at fire-sale prices to remain liquid and stave off a bank run sparked by FTX’s collapse in November. Source

In Jan. 2023, SilverGate attempted to pre-emptively cut costs further by laying off 40% of their staff, and killing some of their projects, like a potential project with Meta. They were also going to sell 1.7B more of their assets to try and meet further obligations.

Yesterday evening the company stated they wouldn't be able to submit their annual 10-K report on time and they were "evaluating the impact that these subsequent events have on its ability to continue as a going concern"

The companies stock price was already down 90% since March 2022, but after news broke late yesterday - the stock price has fallen another 42% since open.

https://preview.redd.it/9x7usdz6ccla1.png?1016&format=png&auto=webp&s=ca23755e2051d98606737aceb643ba77f85dcaa6

The big question is - what does this mean for the Crypto Industry: and does the failure of Silvergate have fall out that will spread? All of the largest crypto exchanges have connections with Silvergate: Coinbase, FTX, Binance, Kraken - all have/had relations with Silvergate.

• The November FTX failure put a huge pinch on the liquidity of Silvergate and they held funds for both FTX, and Alameda research. They're also undergoing a probe related to Fraud. Source
• In February CZ was caught withdrawing $400M in funds from BinanceUS to a firm controlled by CZ. Source
• Today, Coinbase just announced they were cutting all ties with Silvergate and stated they had minimal exposure to the company. Source
• Kraken still uses Silvergate for USD transfers. Source

Lots of Crypto Firms and Industries have connections with Silvergate as they're a huge behind the scenes player. The potential that this company doesn't have enough funds to meet it's debt obligations or the reserves of their clients is a huge concern. A major player that connects the top players in the crypto industry is at risk of complete failure, and it's not clear if they have enough assets to stay afloat or meet their current obligations.

Edit: They are also a player in the world of USDC handling both Issuance and Redmption. Source

https://www.circle.com/blog/silvergate-exchange-network-sen-now-available-for-usdc

TLDR: Silvergate is a bank and has been a massive player in crypto since 2013. Since they were caught in the FTX collapse they have been bleeding money. Rumors are currently speculating that they will completely fail. They are players in literally all the top exchanges, and other market makers like USDC. The question is, what else will fall if Silvergate falls?