{"id":1448,"date":"2023-03-09T14:56:01","date_gmt":"2023-03-09T15:56:01","guid":{"rendered":"http:\/\/eseseymabibu.info\/?p=1448"},"modified":"2024-04-25T12:26:29","modified_gmt":"2024-04-25T12:26:29","slug":"silvergate-collapses-what-implications-does-this-have","status":"publish","type":"post","link":"http:\/\/eseseymabibu.info\/index.php\/2023\/03\/09\/silvergate-collapses-what-implications-does-this-have\/","title":{"rendered":"Silvergate Collapses. What Implications Does This Have?"},"content":{"rendered":"<p>by <a href=\"https:\/\/www.the-blockchain.com\/author\/staff-writer\/\" data-wpel-link=\"internal\">Staff<\/a> <\/p>\n<p style=\"font-weight: 400\"><em>By Marcus Sotiriou, Market Analyst\u00a0at the publicly listed digital asset broker\u00a0<a href=\"https:\/\/globalblock.eu\/\" data-saferedirecturl=\"https:\/\/www.google.com\/url?q=https:\/\/globalblock.eu\/&amp;source=gmail&amp;ust=1678462885499000&amp;usg=AOvVaw2Hs0ND74ST0tgp_N2XRhqY\" data-wpel-link=\"external\" rel=\"external noopener noreferrer\">GlobalBlock<\/a> (TSXV:BLOK).\u00a0<\/em><\/p>\n<p style=\"font-weight: 400\">Bitcoin dropped further this morning, as investors are concerned about the consequences of <a href=\"https:\/\/www.theguardian.com\/business\/live\/2023\/mar\/09\/crypto-bank-silvergate-shut-down-uk-house-prices-harbour-energy-wandisco-business-live\" data-wpel-link=\"external\" rel=\"external noopener noreferrer\">Silvergate\u2019s collapse<\/a>. I think this could have significant implications for<a href=\"https:\/\/www.security.org\/crypto\/regulation\/\" data-wpel-link=\"external\" rel=\"external noopener noreferrer\"> crypto regulations in the US<\/a> and banks\u2019 ability to deal with digital asset platforms and cryptocurrency brokerages. This is due to the narrative of crypto causing the problem, which certain politicians are trying to portray.<\/p>\n<p>Yesterday, Senator Sherrod Brown, Chair of the Senate Banking Committee, said, \u201cAs the impact of FTX\u2019s collapse continues to ripple outward, today we are seeing what can happen when a bank is over-reliant on a risky, volatile sector like cryptocurrencies.\u201d In addition, Senator Warren said yesterday, \u201cAs the bank of choice for crypto, Silvergate Bank\u2019s failure is disappointing but predictable. Now, customers must be made whole &amp; regulators should step up against crypto risk.\u201d<\/p>\n<p>What these Senators fail to realise though, is that Silvergate\u2019s demise was not a crypto problem. Silvergate\u2019s collapse was due to $13.3 billion of demand deposits, that depositors could withdraw in minutes, supported by only $1.4 billion of cash. As opposed to being a crypto-related problem, it was clearly due to Silvergate not having enough cash leading to the lack of capital from the bank run. At cryptocurrency brokerages, such as GlobalBlock, these issues are not even possible. Silvergate operated on fractional reserves, like every other bank, and the loss of consumer confidence which was exacerbated by a Senator letter to politicians on social media. This undermined public trust in Silvergate, which catalysed its downfall.<\/p>\n<p>In this case, Silvergate was denied due process, as there is a clear agenda, in my opinion, against the crypto industry from US politicians. We could well see crypto infrastructure companies and cryptocurrency brokerages move offshore because of this approach. We are in fact already seeing this happen at the moment. Just over a week ago, an NFT project, called KDean, partnered with a centralised, off-shore crypto casino to encourage NFT leveraged debt. With the recent US actions, this could just be the start of consumers using offshore platforms for crypto activities.<\/p>\n<p>#blockchain #crypto, #decentralized, #distributed, #ledger<\/p>\n","protected":false},"excerpt":{"rendered":"<p>by Staff By Marcus Sotiriou, Market Analyst\u00a0at the publicly listed digital asset broker\u00a0GlobalBlock (TSXV:BLOK).\u00a0 Bitcoin dropped further this morning, as [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[11],"tags":[],"_links":{"self":[{"href":"http:\/\/eseseymabibu.info\/index.php\/wp-json\/wp\/v2\/posts\/1448"}],"collection":[{"href":"http:\/\/eseseymabibu.info\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/eseseymabibu.info\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/eseseymabibu.info\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/eseseymabibu.info\/index.php\/wp-json\/wp\/v2\/comments?post=1448"}],"version-history":[{"count":1,"href":"http:\/\/eseseymabibu.info\/index.php\/wp-json\/wp\/v2\/posts\/1448\/revisions"}],"predecessor-version":[{"id":1449,"href":"http:\/\/eseseymabibu.info\/index.php\/wp-json\/wp\/v2\/posts\/1448\/revisions\/1449"}],"wp:attachment":[{"href":"http:\/\/eseseymabibu.info\/index.php\/wp-json\/wp\/v2\/media?parent=1448"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/eseseymabibu.info\/index.php\/wp-json\/wp\/v2\/categories?post=1448"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/eseseymabibu.info\/index.php\/wp-json\/wp\/v2\/tags?post=1448"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}