Silvergate once again hit the headlines after the firm suspended some of the virtual and digital asset operations on its platform after the financial institution involved with the distribution of its digital coin raised concerns about the viability of the digital asset.
The crypto transaction service is one of the best services that SEN, the institution’s platform for virtual and digital payments. Unlike traditional financial institution transfers that may take much longer than expected for them to execute a transfer, the suspended service enabled traders and investors to make instant transfers and across-the-border payments.
Doubts on the Network Viability
With the growing uncertainty that clouds the crypto space, the institution’s clients have kept their distance from the bank, urging their consumers to divert their assets elsewhere, promising they are safe.
The institution has suffered losses of around one billion dollars by the end of the fourth quarter and other significant losses in the past two consecutive months; the cryptocurrency bank shared with the public in a filing this week that the crypto exchange might be forced to re-examine the viability of its digital asset.
In the same report, the institution disclosed that its decision was influenced by the fact that the bank was vulnerable and subjected to attacks from the authorities, scrutinization by the bank regulators, and the United States Department of Justice.
That includes the Securities and Exchange Commission and emphasized that its potential to continue with its operations will make the institution attract even more attention from the authorities adding that the embarking of these services will remain uncertain. The following day, many noticeable cryptocurrency members abandoned the financial institution.
The suspension comes after bank regulators issued warnings to banks and financial institutions they govern concerning the threats involved with exposure to the crypto space, including volatility, according to crypto experts and analysts who suggest that they are a significant number of risks and threats associated with the virtual and digital industry compared to traditional capitalization.
Cryptos, virtual and digital assets, are decentralized commodities that cannot be regulated by any kind or type of entity and lack the stability of a well-developed financial institution, making them vulnerable and exposed to extreme price fluctuations. In addition, the security of digital and virtual asset exchanges and their accounts can be jeopardized, resulting in huge losses of funds and virtual and digital assets.
Traders and investors are urged to take note of the risk and threat tolerance, and experts suggest that be anyone decides to venture into such an enterprise, they should evaluate and re-examine any of these investments before behind dedicated and committed to the course.
The crypto bank introduced its exchange platform more than six years ago to keep up with the increasing demand for digital and virtual currency payment solutions. The protocol has become famous over the years among organizational investors because of its potential to offer efficient, reliable, and secure payment structures for digital, virtual, and crypto asset transactions.
The financial institution has become a major player in the crypto ecosystem. It provides many services to boost and utilize these assets for investment and trading purposes, including foreign exchange, lending, and custody services.
Before the institution decided to suspend its crypto exchange services, its exchange platform had been identified for its exceptional services in the crypto ecosystem. So it comes as a surprise to its most loyal users.