Silvergate stock tanks: Crypto firms are rushing to cut their ties to a major US bank called Silvergate Capital after the financial institution delayed the release of its annual 10-K report, signalling that the institution may be in serious financial distress. Welcome to the The Chainsaw Weekly Wrap.
A number of high profile cryptocurrency exchanges from around the world, including US-based Coinbase, Singapore-headquartered Crypto.com, and the Winklevoss-owned Gemini all distanced themselves from Silvergate in the wake of this delay.
Silvergate partners
The Luxembourg-based crypto exchange Bitstamp and US payment provider Circle also gave notice that they would no longer be using Silvergate as a banking partner for cryptocurrency-related financial services.
Coinbase took to Twitter to alert its users that it would no longer facilitate payments through Silvergate, saying that the decision was made “in light of recent events and out of an abundance of caution”.
For those of you reading along in a state of minor confusion; a ‘10-K’ report, is a comprehensive document filed each year to the US Securities and Exchange Commission (SEC) by a publicly-traded company about its financial performance. The fact that Silvergate delayed their notice reveals that there might be some major money troubles.
Silvergate stock plunge
In response to this, the price of Silvergate stock (NYSE:SI) plummeted 55% today. At the time of writing, the price of Silvergate’s share price is down a staggering 93% from its all-time-high of US$222, which it hit back in November 2021 during the last major crypto market rally.
This week in Web3
While the Silvergate crisis dominates headlines today, a bunch of other stuff went down in cryptoland this week as well, so here’s all of it condensed for your reading pleasure in this edition of The Chainsaw Weekly Wrap.
To kick things off, the Solana Network went down for the 10th time, sparking outrage from the wider crypto community. Engineers and developers from the Solana foundation still don’t know what caused the 20 hours of downtime, but regardless, many Solana holders weren’t exactly stoked that transactions and assets were frozen for nearly an entire day.
Visa ain’t cutting back on crypto
Reuters gave everyone a small fright when it released a report saying that payment giants Mastercard and Visa were looking to “slam the brakes” on any new crypto partnerships.
Cuy Sheffield, the Head of Crypto at Visa was quick to hit back, labelling the report “inaccurate”. On Wednesday morning, he informed his 23,000 Twitter followers that Visa had every intention to keep forging ahead with new crypto payments projects.
Robinhood got served (3 months ago)
One of the largest retail brokerage companies in the United States, Robinhood Markets, revealed that they were under investigation by the SEC, after their 10-K filing showed that they received a subpoena in December 2022 over their handling of cryptocurrencies and digital assets.
Australia launches pilot for CBDC
On Thursday morning, the Reserve Bank of Australia announced that Commonwealth Bank and ANZ, respectively the largest and third-largest banks in Australia, would be joining 12 other financial institutions in testing out the nation’s very first central bank digital currency (CBDC), dubbed the ‘eAUD’.
The pilot project will officially launch on March 31 and finish on May 31. A final report on the program, including an assessment on the effectiveness of the cases, is scheduled to be published June 30.
In a joint statement from the Reserve Bank of Australia and the Digital Finance Cooperative Research Centre, RBA Assistant Governor Brad Jones said the program will achieve two primary goals.
“It will contribute to hands-on learning by industry, and it will add to policymakers’ understanding of how a CBDC could potentially benefit the Australian financial system and economy,” he said.
ChatGPT continues its uhh, ‘expansion’
If you can’t beat them, join them, which I guess is the route that the International Baccalaureate (IB) is taking: the examination body announced this week that it’ll allow students in UK IB schools use ChatGPT in essays as long as they make mention of it.
The popular chatbot is still banned in public schools here in Australia, so we’ll just have to wait and watch the government’s next steps.
On bookstores online on the other hand, e-books co-authored by ChatGPT are now being sold by the largest retailers in the country, Booktopia and Readings. Not everything that ChatGPT is spitting out is gospel, though – a friendly reminder to fact-check information from the chatbot, because it apparently made up sources.
NFTs on everything, everywhere
All eyes of the NFT world are still on Ordinals, which popularised NFTs on the Bitcoin network. NFT degens are cashing in on Ordinals, but its presence continues to divide many Bitcoiners. Why? Read here.
What else went down in NFT land? A Web3 company called Artifact Labs said it will sell relics from the Titanic shipwreck as NFTs. No further details are announced since and it’s clear that the digital collectibles will be from the literal ship, not the James Cameron film. But a small part of me still hopes that they’ll release a collection featuring Jack and Rose.
Deals on deals
Some deals still went around Web3. Here are some of the biggest deals that took place this week:
- Chain Reaction, an Israeli startup, raised US$70 million in Series C funding to focus privacy hardware on the blockchain.
- SALT, a lending provider, raised US$64 million to assist on providing ‘proof of reserves’ and financial transparency to help bring greater trust to customers.
- Taurus, a digital asset infrastructure company, raised US$65 million in a Series B round to hire engineers, help expand sales and customer success, and maintain security, risk and compliance requirements.
- Carbonplace raised $45 million in seed funding to expand partnerships with carbon market players.
Markets wrapped
Crypto markets have been hit hard by the Silvergate turmoil. At the time of writing, both Bitcoin (BTC) and Ethereum (ETH) have fallen around 5% on the day, as investors retreat from an increasingly volatile market.
BTC is currently changing hands for US$22,370 and investors fear that if the cryptocurrency keeps shedding gains, it will experience a sharp decline to below the fabled US$20k support line.
Bearish sentiment has been further magnified by the possibility of the US Federal Reserve hiking interest rates further in the next Federal Open Market Committee (FOMC), scheduled for March 20.
Winners and losers
The biggest gainer this week was Maker DAO (MKR), which is the organisation responsible for issuing the algorithmic stablecoin DAI. Maker gained nearly 17% this week as investors began looking for alternative stablecoin in the wake of increased regulatory action against centralised US Dollar-backed stablecoins.
Midway through last month, both the SEC and the New York Department of Financial Services (NYDFS) cracked down on Binance’s US Dollar-pegged stablecoin ‘BUSD’.
The second largest gainer was AGIX, the native token of a decentralised artificial intelligence marketplace SingularityNET. The AGIX token surged throughout February as investors threw their weight behind the AI narrative, before witnessing a major pullback as excitement cooled off.
The biggest loser of this week was Conflux (CXS), which fell more than 30%. Conflux is one of China’s only major public blockchains. Over the last few weeks a number of tokens with ties to China and Hong surged as Hong Kong announced a relaxation of its policies towards crypto. CFX gained a whopping 1300% between January 1 and February 21. This week’s decline can be attributed to the market calming down a little after such a major rally.
And that’s all from this edition of The Chainsaw Weekly Wrap. Enjoy your weekend from the crew here at The Chainsaw.
As always, here’s some fresh memes from us to you.
