Crypto bank Silvergate reveals $2.5M exposure to Genesis
The company called its exposure "minimal" and said it has no outstanding loans.
Silvergate said it had less than $2.5 million deposits between itself and Genesis on two separate dates — Dec. 31, 2022, and Jan. 19, 2023.
The company said that Genesis is not a custodian for its SEN Leverage loans, which Bitcoin collateralizes. Silvergate also said it has “no outstanding loans nor investments in Genesis.” The company assured its customers that their assets were secure and concluded by asserting that its exposure to Genesis is “minimal.”
Silvergate similarly downplayed its relationship with Sam Bankman-Fried’s FTX exchange after the latter firm collapsed in November. Silvergate said it had under $1.2 billion of FTX deposits at that time, amounting to less than 10% of its total deposits. The firm was nevertheless accused of being at the center of FTX’s collapse.
The continued controversy led to an $8.1 billion bank run that compelled Silvergate to sell a portion of its assets and lay off 40% of its staff this month.
It remains to be seen whether Genesis’ more recent failure will have such dramatic long-term effects. Its crypto lending unit filed for chapter 11 bankruptcy only today.
Genesis owes more than $3.5 billion to its largest creditors, including Mirana (the investment arm of ByBit), Cumberland DRW, MoonAlpha (operators of Babel Finance), the Stellar Development Foundation, and VanEck’s New Finance Income Fund.
Silvergate was not mentioned in the earlier report.