White House Press Secretary Karine Jean-Pierre has said that the White House is “aware of the situation” regarding troubled crypto bank Silvergate, and will “continue monitoring the reports.”
“It is obviously only the latest company in the cryptocurrency field to experience significant issues,” Jean-Pierre said, while declining to comment specifically on the situation at Silvergate.
The Press Secretary pointed to recently-issued guidelines from U.S. banking regulators on how banks can protect themselves from crypto-related risks, noting that President Joe Biden has “repeatedly called on Congress to take action to protect everyday Americans from the risk posted by digital assets.”
In late February, the U.S. Federal Reserve released a statement on the risks posed to banks by exposure to crypto, cosigned by the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC).
“Certain sources of funding from crypto-asset-related entities may pose heightened liquidity risks to banking organizations due to the unpredictability of the scale and timing of deposit inflows and outflows,” the statement said.
Silvergate bank struggles
The news comes as crypto-friendly bank Silvergate has faced significant financial uncertainty in recent weeks.
Last week, Silvergate Capital Corporation, Silvergate Bank’s parent company, postponed filing its annual 10-K report with the U.S. Securities and Exchange Commission.
The firm claimed it needs additional time to allow an independent accounting firm to complete certain audit procedures. In its filing, it referred to, “a number of circumstances” that will “negatively impact the timing and the unaudited results previously reported in the Earnings Release.”
The turmoil affecting Silvergate has seen many of the largest firms in the crypto world cut their ties with it in some capacity, for example by limiting payments to and from the bank.
These firms include, but are not limited, to crypto exchanges such as Crypto.com, Coinbase, Gemini, and Bitstamp.
Recent events have had a devastating impact on Silvergate’s share price. The firm’s stock now trades at $5.41 at the time of writing, a decrease of over 200% since its peak in November 2021, when the firm’s stock reached a high of $219.75.
