• KuCoin CEO Johnny Lyu has addressed the Silvergate collapse, assuring users that their funds are safe.
• Other major exchanges have also distanced themselves from Silvergate, noting that they had no funds or losses at the bank.
• Silvergate’s collapse could boost crypto-native options for payment settlement and slow down innovation in the crypto space if startups can’t access banking services.
Silvergate Bank’s Voluntary Liquidation
Silvergate Bank’s voluntary liquidation is causing concern amongst crypto firms who rely on traditional financial institutions to access asset liquidation and convert assets into fiat currency. The fall of Silvergate is wreaking havoc among crypto exchanges who scramble to distance themselves from it.
KuCoin Reassures Users
KuCoin CEO Johnny Lyu reassured users that the exchange has not incurred any asset losses at Silvergate Bank and their funds are safe. Lyu expressed regret over Silvergate’s liquidation but was relieved that users will receive their deposits in full. He also urged the industry to strengthen risk management and regulatory compliance efforts moving forward.
Other Major Exchanges Distancing Themselves from Silvergate
Binance, Coinbase, OKX, and Paxos have all stated that they had no funds or losses at the bank. On Wednesday, Silvergate announced it would shut down its operations and return all funds to credits.
Impact of Collapse on Crypto Space
The collapse of Silvergate could benefit stablecoins while impacting small crypto startups more significantly due to trouble accessing banking services going forward. This could significantly slow down blockchain adoption as well as innovation in the crypto space if startups can’t get access to banking services anymore.
The fall of Silvergate was a lesson for the cryptocurrency industry to strengthen risk management and compliance efforts going forward while simultaneously boosting crypto-native options for payment settlement such as stablecoins.