The collapse of FTX and Alameda Research in 2022 triggered a massive reaction that has since had serious repercussions for other crypto-related firms, including Genesis Trading, which was recently forced to file for Chapter 11 bankruptcy protection courtesy of their Digital Capital Group backers.
Therefore, US regulators, who described the FTX implosion as the largest modern corporate failure, have stepped up their enforcement of organisations related to cryptocurrencies.
The United States Securities and Exchange Commission (SEC), for instance, has made it clear that all digital assets apart from Bitcoin are unregistered securities.
In addition, the SEC has declared that all crypto staking programs, including the one formerly operated by Kraken exchange, are offering unregistered securities. As a result, Web3 businesses registered in the USA have encountered challenges in keeping up with their counterparts from crypto-friendlier jurisdictions.
This is well demonstrated by the closure of Silvergate Capital Corp. (NYSE: SI), whose stock price has plummeted by more than 96 per cent over the last 12 months. Notably, Silvergate Capital released a statement last week, announcing their intent to shut down and liquidate their assets in an orderly manner.
Binance, Coinbase, and OKX Assert No Exposure to Silvergate
In the wake of Silvergate Capital’s closure, some of the largest centralised cryptocurrency exchanges, which safeguard billions in customers’ assets, have declared that they have no exposure to the defunct crypto bank. Changpeng Zhao (CZ), the CEO of Binance, made this announcement on Twitter, stating that the exchange does not have any losses related to the Silvergate Capital collapse.
Six days ago, Coinbase Global revealed that it was not accepting or initiating payments to or from Silvergate Capital. Following the closure of Silvergate Capital yesterday, Coinbase has announced that it does not have any customer or corporate cash at the defunct crypto bank.
