Based in La Jolla Silvergate Capitala cryptocurrency-focused bank holding company, told investors on Friday that its exposure to a major exchange failure was limited to deposits.
Crypto exchange FTX filed for bankruptcy protection in the United States on Friday and its founder Sam Bankman-Fried resigned as chief executive in the crypto industry’s biggest explosion.
The beleaguered crypto trading platform had struggled to raise funds to stave off collapse as traders rushed to withdraw $6 billion in just 72 hours and rival exchange Binance scrapped a deal proposed rescue.
Silvergate CEO Alan Lane said FTX represents “less than 10%” of his company’s $11.9 billion in deposits.
“To be clear, our relationship with FTX is limited to deposits,” Lane said, adding that “Silvergate’s platform was designed to support our clients during times of market volatility and transformation.”
The company does not hold deposits in Bitcoin and other cryptocurrencies, but helps investors trade and move digital currency between exchanges.
“As a well-capitalized federally regulated banking institution, we maintain a strong balance sheet with sufficient liquidity to meet the needs of our customers,” Lane said.
Silvergate shares closed 5% higher on Friday on the New York Stock Exchange, but ended the week down 34%.