Silvergate Bank, the oldest bank in the crypto industry, is facing insolvency and potential collapse, which could have significant effects on the entire space. The bank has been a key player in the tech banking game, taking risks on up-and-coming tech businesses since the late 1980s. However, its first mover advantage in crypto banking with the Silvergate Exchange Network (SEN) has now become problematic as over 1,300 clients, including high-profile crypto companies like FTX and Alameda Research, use the SEN, making it difficult to prove every transaction is legitimate and raising concerns about market manipulation.
Industries like the cannabis industry, the crypto industry, the adult industry, they all have one thing in common. Banks do not like them. What these banks want to do is they want to force people to fit inside of their pretty little box so they can work within their establishment. Some industries are forced outside of the norm because the banks just won’t serve them. And this is where we see the entrance of shadow banking. This is where people have to jump over hurdles just to get banked, and when they do that, These shadow banks, well, they’re not always playing by the rules. What if I told you the oldest bank in crypto is a shadow bank and it’s about to go down? Today, we’re talking about Silvergate. Let’s get it!
First Mover Advantage in Crypto Banking
When crypto got started, not many banks wanted to get involved with crypto, Just like we were talking about these other industries. Silvergate was the first bank to take that chance. They’ve been in the world of crypto banking for over 10 years now. And many are just getting started. Because they had a first mover advantage with their tech, They’ve got over 1,300 clients. And who those clients are? You’re going to love it. Unfortunately for them, these clients included FTX and Alameda Research, among others, who together had over 20 accounts with Silvergate. I wonder if they’ve got some accounts that weren’t even in on the bankruptcy. That’d be interesting to see.
Contagion and the Threat of Insolvency
Just a few weeks ago, Silvergate had the full attention of senators such as John Kennedy and Elizabeth Warren, and since then, things have not been great for Silvergate. They’ve been in the news. There’s been talks about insolvency. The connections between Digital Currency Group and Barry Silbert and Genesis Trading, they don’t look good right now. So here’s the question that we need to be thinking about. And I think already know the answer. In the next 10 years, Will Silvergate help crypto as much as it did in the last 10 years? Or will this situation spiral into the most cataclysmic black swan in the history of crypto? If Silvergate were to go down, the effects that would have on the entire space, well, it may not be permanent, But we’ll be feeling them for a long time.
History of Rolling the Dice
Silvergate Bank got started in San Diego in 1988, formerly known as La Jolla Bank. They made their way by taking a chance. Hmmm. Interesting. They took a chance on crypto. It wasn’t the first chance they took. This company has a history of rolling the dice. They took a chance on up and coming tech businesses from the late 80s to early 2000s. Guys, in the late 80s, a tech business was Rock ‘Em Sock ‘Em Robots. Their first big break was their partnership with Qualcomm, who was a frontrunner in wireless technology.
Key Player in Tech Banking Game
Taking big risks in the tech industry is Silvergate’s bread and butter. And at this point, they’re a key player in the tech banking game. Hmmm. Let’s think about what’s going on right now with Silvergate and the contagion. Everyone was overleveraging and promising things that they didn’t have. That’s what has led us to this gigantic collapse, Exactly what the traditional market, the traditional banks do. And nobody knows how to lend them out like Silvergate.
Creation of Revolutionary Tech
Not just a great documentary on Netflix, Banking on Bitcoin, one of the first ones I watched back in 2016. Just like how they took chances on tech at the turn of the century, it’s exactly what they did with crypto back in 2013. I was in crypto before Silvergate Bank. That’s one of my biggest flexes. At this point in time, Bitcoin had a bad reputation from its connection to the Silk Road, obviously, a drug website on the dark web where people would exchange Bitcoin for mostly weeds and shrooms, I think. I don’t know. Imagine the guy that paid 30 Bitcoin for some shrooms. He’s still tripping to this day. Silvergate saw past the noise and took a chance on crypto. They were the first bank to build a key infrastructure in crypto banking that opened the doors to a digital revolution.
Large Majority of Market Manipulators Under One Roof
Does it not worry anyone that a large majority of market manipulators are all under the same roof? And I can tell you that from things that I’ve been hearing, it’s not a fake thing. There was a group of large players in crypto that literally were communicating back and forth. On how to manipulate the market. Companies that you wouldn’t think would be working together working together to market manipulate. How can we prove every transaction on the SEN is legitimate?