In relation to Genesis, Silvergate claimed to have less than $2.5 million in deposits for December 31, 2022, and January 19, 2023.
According to the statement, Genesis is not a custodian for the company’s SEN Leverage loans, for which Bitcoin serves as collateral. Silvergate stated that it “neither has any outstanding debts nor interests in Genesis.” The business ended by saying that its exposure to Genesis is “limited” and gave its clients the assurance that their investments were protected.
After Sam Bankman-Fried’s FTX exchange collapsed in November, Silvergate also minimized its connection to it. At that time, Silvergate reported having FTX deposits totaling less than $1.2 billion, or less than 10% of all of its deposits. However, the company was charged with being at the center of FTX’s collapse.
Silvergate was forced to sell some of its assets and fire 40% of its workers this month as a result of the ongoing dispute, which caused an $8.1 billion bank run.
It’s unclear if Genesis’ more recent failure will have such devastating long-term consequences.
Its crypto lending division just recently filed for chapter 11 bankruptcy.