Cryptocurrency

Crypto bank Silvergate reveals $2.5M exposure to Genesis

Silvergate Capital, the parent company of Silvergate Bank, revealed in a press release that it has limited exposure to Genesis Global Capital. January 20th.

Silvergate said there were less than $2.5 million in deposits between the company and Genesis on two separate dates, December 31, 2022 and January 19, 2023.

The company said Genesis is not the custodian of the Bitcoin-backed SEN leveraged loan.Silvergate also said it has “no outstanding loans or investments in Genesis.” The firm concluded by ensuring that its clients’ assets were safe and claiming that its exposure to Genesis was “minimal.”

Silvergate similarly downplayed its relationship with the FTX exchange after Sam Bankman-Fried’s FTX exchange went bankrupt in November. According to Silvergate, his FTX deposits at the time were less than his $1.2 billion, making him less than 10% of total deposits. Nonetheless, the company was accused of being at the center of his FTX collapse.

The ongoing dispute led to an $8.1 billion bank run, forcing Silvergate to sell some of its assets and lay off 40% of its staff this month.

It remains to be seen whether Genesis’ recent failure will have such dramatic long-term consequences. The company’s cryptocurrency lending unit filed for Chapter 11 bankruptcy today.

Genesis owes over $3.5 billion to its largest creditors, including Mirana (the investment arm of ByBit), Cumberland DRW, MoonAlpha (operator of Babel Finance), Stellar Development Foundation, and VanEck’s New Finance Income Fund.

Silvergate was not mentioned in previous reports.

Posted In: United States, Bankruptcy

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