Tether and MicroStrategy Deny Any Exposure to Silvergate

Business intelligence firm MicroStrategy and stablecoin issuer Tether have become the latest two firms to publicly deny any meaningful exposure to Silvergate Bank.

The news comes after Silvergate announced on March 1 that it would postpone the filing of its annual 10-K financial report, which has many fearing the cryptocurrency bank may be on the brink of a bankruptcy filing.

MicroStrategy has denied any meaningful exposure to Silvergate as crypto firms who dealt with the crypto bank are rushing for the exits amid concerns about its financial condition.

In a recent tweet, business intelligence firm MicroStrategy clarified that their Bitcoin holdings, valued at $2.9 billion and comprising over 130,000 Bitcoin, are not held in custody by Silvergate and that they do not have any other financial ties with the embattled crypto bank.

Furthermore, MicroStrategy noted that there will not be a need to pay back a loan from the crypto bank until the first quarter of 2025 and that the loan repayment would not be accelerated if Silvergate becomes bankrupt or insolvent.

Similarly, Tether‘s chief technology officer, Paolo Ardoino, tweeted that the stablecoin issuer was not exposed to the crypto bank on March 2. Silvergate’s collapse will be harmful to the entire crypto industry as it offers financial infrastructure solutions and services to top crypto exchanges, institutional investors, and mining firms worldwide.

Likewise, Silvergate offers collateralized lending services, digital asset custody management, and a stablecoin infrastructure platform to a number of institutional players within the crypto industry.

The news comes after Silvergate announced earlier this week that it would not be able to file its annual 10-K financial report to the SEC on time and that it is evaluating its ability to stay in business - the bank's shares fell more than 55% Thursday following the announcement. Gemini said it will no longer accept deposits and process withdrawals via the crypto firms ACH and wire transfers. Paxos, Galaxy Digital, Bitstamp, Circle, and Coinbase revealed plans to scale back their collaboration with Silvergate following its late 10K filing.

In recent times, the U.S. Department of Justice initiated investigations into the exact dealings between the firm and FTX. On February 14, a lawsuit filed against FTX said Silvergate allegedly aided and abetted a “multibillion-dollar fraudulent scheme” that was organized by former FTX CEO Sam Bankman-Fried.