Leading crypto bank Silvergate revealed that its exposure to the bankrupt crypto lender Genesis was less than $2.5 million as of Jan. 19.
In a press release issued on January 20, Silvergate Capital, the parent company of the crypto Bank, disclosed a small exposure to Genesis Global Capital.
In relation to Genesis, Silvergate claimed to have deposits of less than $2.5 million for the dates of December 31, 2022, and January 19, 2023. Genesis is not a custodian for the company’s SEN Leverage loans, which Bitcoin serves as collateral for, according to the statement.
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.”
Similar to how Silvergate minimized its connection to Sam Bankman-Fried’s crypto exchange following that company’s collapse in November. Less than $1.2 billion, or less than 10% of its total deposits, were FTX deposits at the time, according to Silvergate.
Nevertheless, the company was charged with being the main cause of FTX’s demise. As a result of the ongoing scandal, a $8.1 billion bank run forced Silvergate to sell some of its assets and fire 40% of its workforce this month.
Whether Genesis most recent failure will have such profound long-term ramifications is still up in the air. Only today did its crypto lending division declare for chapter 11 bankruptcy.
Genesis owes its biggest lenders more than $3.5 billion, including the Stellar Development Foundation, Cumberland DRW, MoonAlpha (the company that runs Babel Finance), Mirana (the investment arm of ByBit), and VanEck’s New Finance Income Fund.
