Cryptocurrency exchange Coinbase Global Inc COIN announced Thursday that it has stopped accepting or initiating payments to or from Silvergate Capital Corp SI out of an "abundance of caution."
On Wednesday, Silvergate delayed the filing of its annual report and said it is evaluating its ability to continue as a going concern.
The stock is losing nearly half its value in Thursday morning trading.
Coinbase said client funds are safe and accessible; that it will be using Signature Bank SBNY for payments in U.S. dollars moving forward; and that it has taken proactive measures to ensure that clients do not experience any impact from this change.
The exchange also clarified that client cash is held at FDIC-insured U.S. banks, and when a client has a large dollar balance, Coinbase stores their cash in a U.S. government money market fund to keep it safe and liquid.
Coinbase stated that it has minimal corporate exposure to Silvergate, which is a U.S.-based financial institution that offers services to the digital currency industry.
The change is specific to banking in U.S. dollars and does not affect payment instructions in pounds or euros and is effective immediately, according to Coinbase.
COIN, SI, SBNY Price Action: Silvergate shares were down 45.9% at $7.32 at the time of publication, while Coinbase shares were losing 10.25% and trading at $58.04.
Signature Bank shares were trading down 4.9% at $107.09.
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Photo courtesy of Coinbase.
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