Silvergate Capital has issued an update regarding the recent developments with the FTX exchange. The company has said that FTX deposits accounted for less than 10% of the total deposits made by digital asset customers.
Silvergate denies heavy exposure to FTX
Companies have been coming forward to shed light on their exposure to the FTX exchange following the insolvency and now bankruptcy of the company. The CEO of Silvergate Capital, Alan Lane, has disclosed details about the bank’s relationship with the failed cryptocurrency exchange.
Lane said Silvergate had total deposits of $11.9 billion from all its digital asset customers. FTX deposits represented less than 10% of this amount. The executive added that Silvergate had no outstanding loans or investments in the FTX exchange.
“FTX is not a custodian for Silvergate’s Bitcoin-collateralized SEN Leverage loans. To be clear, our relationship with FTX is limited to deposits,” Lane added.
Lane has also added that all the SEN leverage loans were still trading as expected, adding that these loans had recorded no losses and no forced liquidations. This stressed that the company’s operations remained steady and had not been affected by the recent developments.
The company has also added that all its SEN leverage loans are collateralized in Bitcoin. It does not make unsecured loans or collateralize SEN leverage loans using other digital assets.
According to Lane, the Silvergate Capital Corporation was created to support clients facing high levels of volatility and transformation. He added that the Silvergate Exchange Network continued to operate normally. As an institution fully regulated, Lane said Silvergate had maintained a robust balance sheet and high liquidity to support its customer needs.
Companies continue to deny exposure to FTX
The collapse of the FTX cryptocurrency exchange could have significant ripple effects if it is revealed that a substantial number of companies had exposure to the exchange. BlockFi has already halted withdrawals because of its connection with FTX.
However, firms that did not have any exposure to FTX are distancing themselves from the exchange. The CTO of Tether, Paolo Ardoino, had earlier said that the stablecoin issuer has no exposure to FTX or Alameda. Ardoino added that Tether is only issued and redeemed on market demand.
The co-founder and CEO of Circle, Jeremy Allaire, has also posted a thread explaining the relationship between FTX and Circle, the issuer of the USDC stablecoin. Allaire explained that Circle has never issued loans to FTX or Alameda. Moreover, Circle never held FTT as collateral, and it has never held a position in FTT or traded the token.