Silvergate Closes SEN Platform Institutions Used to Move Money to Crypto Exchanges

Nikhilesh De is CoinDesk’s managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.

Ian Allison is an award-winning senior reporter at CoinDesk. He holds ETH.

Silvergate Bank, which warned this week about its ability to remain in business, discontinued its SEN platform that institutions used to move money to crypto exchanges.

“Effective immediately Silvergate Bank has made a risk-based decision to discontinue the Silvergate Exchange Network (SEN),” the company said on its website Friday. “All other deposit-related services remain operational.”

A spokesperson for the bank sent a similar message to companies within the crypto sector.

“Unfortunately, we have no additional information to share at this time,” the spokesperson said.

SEN is a 24/7 instant settlement service that the bank’s clients could use to conduct transactions between each other at any time, including nights and weekends. The bank counted a number of major crypto firms as its clients for the service, including Binance US, Kraken, Gemini and ErisX (prior to the latter’s acquisition by Cboe).

Silvergate has had a rough week, after disclosing on Wednesday that it would delay the filing of its annual report due to questions from its auditors. In the same notice, the bank admitted it was facing investigations from bank regulators and the U.S. Department of Justice, and said its ability to be a “going concern” over the next year may be in doubt.

A number of prominent crypto clients bailed on the bank the next day, and its stock price fell nearly 60% before somewhat stabilizing on Friday.

UPDATE (March 3, 2023, 23:50 UTC): Adds additional information.

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DISCLOSURE

Nikhilesh De is CoinDesk’s managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.

Ian Allison is an award-winning senior reporter at CoinDesk. He holds ETH.

Silvergate Bank, which warned this week about its ability to remain in business, discontinued its SEN platform that institutions used to move money to crypto exchanges.

“Effective immediately Silvergate Bank has made a risk-based decision to discontinue the Silvergate Exchange Network (SEN),” the company said on its website Friday. “All other deposit-related services remain operational.”

A spokesperson for the bank sent a similar message to companies within the crypto sector.

“Unfortunately, we have no additional information to share at this time,” the spokesperson said.

SEN is a 24/7 instant settlement service that the bank’s clients could use to conduct transactions between each other at any time, including nights and weekends. The bank counted a number of major crypto firms as its clients for the service, including Binance US, Kraken, Gemini and ErisX (prior to the latter’s acquisition by Cboe).

Silvergate has had a rough week, after disclosing on Wednesday that it would delay the filing of its annual report due to questions from its auditors. In the same notice, the bank admitted it was facing investigations from bank regulators and the U.S. Department of Justice, and said its ability to be a “going concern” over the next year may be in doubt.

A number of prominent crypto clients bailed on the bank the next day, and its stock price fell nearly 60% before somewhat stabilizing on Friday.

UPDATE (March 3, 2023, 23:50 UTC): Adds additional information.

Sign up for Money Reimagined, our weekly newsletter exploring the transformation of value in the digital age.

By signing up, you will receive emails about CoinDesk product updates, events and marketing and you agree to our terms of services and privacy policy.

DISCLOSURE