The prices of Dogecoin and Litecoin dropped on Tuesday morning as investors digested the news that Silvergate Bank’s exposure to cryptocurrency exchanges had led to a loss of business and increased costs.
Dogecoin and Litecoin prices dropped on Tuesday morning.
Dogecoin and Litecoin prices dropped on Tuesday morning. The two altcoins were heavily exposed to the San Diego based bank Silvergate. This comes after CEO Alan Lane revealed that FTX had taken a large amount of capital away from the bank. According to reports, this was one of several investments that have gone sour over recent months as they have been unable to pay back loans or repay investors’ money due to poor performance within their businesses (FTX).
The two altcoins were heavily exposed to the San Diego based bank Silvergate.
Silvergate is one of the few banks that directly services cryptocurrency exchanges, and it’s known for its strong business relationships with cryptocurrency companies.
In addition to its direct relationship with Silvergate, FTX also had exposure to other major financial institutions such as BMO Financial Group and TD Bank. This week it announced that it had withdrawn $1 billion in capital from Silvergate Bank, which is known for its strong business relationships with cryptocurrency companies. According to Coinmarketcap data, Silvergate Bank has $6 billion in assets under management and provides services such as banking, lending and investment management to clients across the globe.
Dogecoin and Litecoin saw their prices drop Tuesday morning as investors began to fret over the exposure of Silvergate Bank to cryptocurrency exchanges.
Dogecoin and Litecoin saw their prices drop as investors began to fret over the exposure of Silvergate Bank to cryptocurrency exchanges. The decline in both cryptocurrencies is a concern for Dogecoin and Litecoin investors, who have seen prices rise sharply in recent months on speculation regarding the bank’s partnership with two digital currency exchanges.
The company has a history of working with cryptocurrency companies, including Bitpay and Kraken. In addition to this strong business relationship, Silvergate has also been an previously an active participant in several ICOs (initial coin offerings) hosted by blockchain startups such as Brave New Coin and Polymath Network; it was listed alongside other crypto-focused banks on CoinList’s platform last year when it launched its own asset management product called “CoinList Capital.”
Silvergate is known for its strong business relationships with cryptocurrency companies, making it one of the few institutions in the United States to directly service exchanges and lending platforms. Silvergate is one of the few institutions in the United States to directly service exchanges and lending platforms. This makes them a key player in the DeFi space, as they work with both traditional banks and crypto companies to provide services like asset custody, digital wallet management, and cross-chain transfers.
In addition to the loss of customers, the bank also incurred higher costs for anti-money laundering compliance.
Silvergate bank also incurred higher costs for anti-money laundering compliance. The bank spent $100,000 in AML compliance expenses in Q1 2019 and has projected a total spending of $300,000 per quarter moving forward. The FTX scandal has resulted in Silvergate Bank losing out on business opportunities by lending money to cryptocurrency companies that were not eligible for Fintech solutions at all.
With the rise of interest in cryptocurrency, the exposure of Silvergate to crypto exchanges has become more significant. This could lead to increased regulatory scrutiny from regulators and other institutions who worry about potential money laundering risks. In addition, lending firms are now under a watchful eye as people have pointed out that stablecoins like Tether lending out it’s own coin like FTX did with FTT, is a systemic risk to the industry.