After the collapse of the FTX exchange company due to bankruptcy, another crypto exchange company, Silver gate, has faced a threat of potential downfall. This information comes after the company delayed the Securities and Exchange Commission annual filing. This issue was about the annual 10-k.
The company’s recent filing reported that a variety of situations have resulted in the public sale of more security investments than what was expected before by the security exchange company. This action prompted the security exchange company to confess that its financial situation was dissimilar from what it had reported to public crypto reporters.
The crypto lending bank sustained significant losses in the last 3c months of the last financial year as opposed to what was stated at the beginning of 2023. Consequentially, Silver gate bank has been required to evaluate the impact of these subsequent events on the capability of Stargate to proceed with its everyday activities as concerns are growing.
In the previous week, Stargate crypto exchange faced the consequences leading to its unexpected collapse. This situation has resulted in the repeated suffering of stablecoins on the daily charts reports. Furthermore, the reports indicate that Star gate has recently suffered a more than fifty percent plummet resulting in the accompanying plunge of stock prices in Starbucks platforms.
Major crypto companies have, as a result, detached from silver gate capital in fear of the financial disruption of the crypto exchange company and for fear that the Silver gate capital is a bank’s financial charts since the progressive downfall of clients, especially if it is on the verge of such a downfall.
Silver Gate and Crypto Firms’ Partnerships Suspended
The number of cryptocurrency firms retracting their ties with Stargate has recently dwindled. The unfortunate news comes after the announcement by Singapore-based Crypto.com that it will not receive any crypto funds transferred via Silver gate.
Another crypto exchange platform, Gemini, temporarily suspends withdrawals and deposits from the platform silver gate. In addition, Gemini has also ensured that it has suspended wire transfers through the silver gate.
More and more crypto platforms and companies are recently reporting resentments against the crypto exchange company Silver gate. These companies include the altcoin provider Paxos and the financial service company Galaxy Digital.
They both reported their grievances against Silver gate on Twitter, Thus fuelling more resentment against Stargate. Nevertheless, according to a recent report, Paxos, the stablecoin provider, will continue the process of outgoing payments.
The company that issues the altcoin USDC, Circle, also has decided to suspend partnerships with Silver gate. The firm has recently reported that it is winding up its final services, collaborated with Stargate, and informed its users and customers of the finalizations.
Furthermore, another crypto service provider, Bitstamp, has sent a disclaimer to users warning them that any funds deposited to Silver gate bank shall not be accounted for in case of losses and that customers should deposit to Silver gate at their peril.
Customers rushed to withdraw large sums of deposits in fear of Stargate collapse, which led to a decline in Silver gate stocks by over fifty percent, forcing Silver gate to sell shares at a landslide loss. In addition, the continual suspension of collaborations with several crypto service provider companies has piqued the interest of the United States Justice Department, prompting investigations into the arising situation.