The Bank Slate


Silvergate Capital: BlockFi exposure is ‘minimal’

Silvergate Capital in La Jolla, Calif., said its exposure to BlockFi, the latest crypto-focused company to seek bankruptcy protection, is limited to a deposit relationship.

The $15.5 billion-asset company said in a press release that it holds less than $20 million of deposits for BlockFi, as of Nov. 28.

Silvergate said that BlockFi is not a custodian for its bitcoin-collateralized SEN leverage loans, which continue to “perform as expected with zero losses and no forced liquidations.” Silvergate added that it has no investments in BlockFi.

Silvergate said it maintains a first-priority lien and security interest in a cash collateral account, which contains $10 million for the benefit of the company supporting ACH services provided to BlockFi.

“As the digital asset industry continues to transform, I want to reiterate that Silvergate’s platform was purpose-built to manage stress and volatility,” Alan Lane, Silvergate’s CEO, said in the release. “The SEN continues to operate as designed, and our support teams are available 24 hours a day, seven days a week to help our customers during this period of adversity.”

BlockFi, in a Nov. 10 tweet notifying customers that banks are closed on Veterans Day, called Silvergate its “US-based banking partner.”

Silvergate’s disclosure comes on the heels of other company releases touting its access to liquidity and limited ties to FTX, which also filed for bankruptcy protection.

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