A new bank caught in the FTX turmoil

The Silvergate brand, from the San Diego area in California, saw its prices plunge by 44% on Thursday.

Whereas the FTX case continues to keep the world of cryptocurrencies in suspense, a new structure has just been caught in the turmoil. It is this time an American regional bank, Silvergate Capital Corporation, whose prices collapsed by 44% in session yesterday.

The establishment had the particularity of offering the possibility of placing deposits in cryptocurrencies. Many Americans opened an account just for this purpose. A manna at the time when the market was booming but which suddenly turned around. Savers rushed to withdraw their money, causing the amount of deposits to drop to 3.8 billion dollars, against 11.9 billion at the end of September. To be able to honor its withdrawals, the bank was forced to sell securities in an emergency, which led to losses of 718 million dollars according to The echoes .

SEE ALSO – Investment: the end of cryptocurrencies?

The Aftermath of FTX’s Fall

The whole cryptocurrency world has been rocked for several months by the FTX scandal. After being founded in 2019, this company has experienced a meteoric rise to become the second largest player in the sector in the world behind Binance, dethroning the illustrious Coinbase launched in 2012. The platform sees transit up to 90 billion dollars per month, its value explodes and reaches, at the beginning of 2022, 32 billion dollars. Before an equally rapid tumble.

Its founder, Sam Bankman-Fried, is accused of having, from the beginning of FTX in 2019, used the money deposited by customers wishing to speculate on cryptocurrencies to finance the activity – and the risky bets – of his brokerage and investment company Alameda. He is also accused of having lied to the financiers who lent money to Alameda about the real financial health of the company and to the investors of FTX.

He finally used some money “Fly” to its clients to pay tens of millions of dollars to political leaders, both Democrats and Republicans, and thus attempt “to buy influence” in Washington, New York federal prosecutor Damian Williams charged at a news conference.


Leave a Comment

Your email address will not be published. Required fields are marked *