San Francisco-based cryptocurrency exchange Coinbase has recently split from Silvergate Bank, a famous bank among crypto investors. This move has prompted a crypto exchange firm to prefer a new bank to engage with.
Coinbase-Silvergate Partnership
Silvergate Bank has been an important partner for Coinbase, facilitating banking and financial services to the customers. It has also offered aid to institutional investors, such as cryptocurrency hedge funds. The bank’s excellent performance in the digital space has made it a prominent choice for many crypto exchanges.
Coin base’s Decision to End the Partnership
The reason for the termination of the partnership is not yet found, but some experts claimed that coinbase has been taking this hard step due to the recent warning given by US regulators on the banks which involve higher risks. To avoid further harm and bankruptcy crypto firm is hunting for new banking partner.
Impact on the Crypto Hedge Fund
While Coinbase’s decision may not have severe harm on its operations, it has pushed one of its clients, a crypto hedge fund, to explore a new bank. The fund, which is claimed to have assets under management in the hundreds of millions of dollars, has been tied with Silvergate Bank for several years.
This is surely one of the worst phases of silver gate bank following the ongoing controversy linked with FTX. What’s more tragic is that coin base is not the only crypto exchange who have taken such a difficult decision, previously five crypto exchanges have dropped their ties with silver gate bank which is a major cause for concern and should be taken into consideration.
