While Silvergate has confirmed its exposure to BlockFi, it remains measured at less than $20 million. Despite this, the company is performing poorly on the stock market, with its share price falling nearly 90% in the space of a year
Silvergate clarifies its position on BlockFi
Institutional digital asset servicer Silvergate yesterday responded to rumours about its relationship with BlockFi. While the lender filed for Chapter 11 bankruptcy in the US, Silvergate confirmed its exposure. However, the exposure remains very small, at less than $20 million.
This amount is negligible compared to the $11.9 billion of money the company manages on behalf of its clients as of 30 September. The company highlighted this figure after the FTX bankruptcy, announcing that it was holding “less than 10%” of its assets there, which is much more substantial in this case.
Regarding BlockFi, Silvergate was keen to clarify the rumours that it and many other players in the ecosystem are currently facing. It warned against false information:
Recently, Silvergate has been the subject of false and misleading statements. For factual and accurate information, Silvergate refers people to its recent press releases, which are available on the company’s website […] in the Investor Relations section and Silvergate’s most recent quarterly report on Form 10-Q and other filings with the Securities and Exchange Commission. “
A stock that follows the global trend
While not a foolproof guarantee of transparency, Silvergate’s status as a publicly traded company requires it to disclose its accounts.
On the subject of stock market listings, its share price on the New York Stock Exchange has been hit hard by the market downturn that began in November 2021. In one year, Silvergate’s stock price has melted by nearly 90%, representing a devaluation of its market capitalisation of just over $6.7 billion:
Silvergate share price
Silvergate’s share price also conceded more than 11% in yesterday’s session after the announcement of its exposure to BlockFi.
Whatever the current turmoil, Silvergate said its loan products called SEN were not impacted by the failures of FTX and BlockFi. Indeed, the funds of this investment vehicle are not kept with these players.
It is worth noting that Silvergate’s SEN product is the one that MicroStrategy used to make its collateralised loan in Bitcoin (BTC).
