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On Wednesday, Silvergate Capital, a publicly traded crypto bank, shared that it would “wind down operations and voluntarily liquidate” its bank division.
The move from the California-based firm followed a run that resulted in it selling off assets at a huge loss to cover over $8 billion in withdrawals amid the broader crypto ecosystem meltdown.
The institution, which was one of the few banks that acted as an intermediary in the space of institutional crypto, is yet another victim of the “crypto winter” following the implosion of FTX, which used the bank to transfer customer funds.
It’s also worth mentioning that FTX and other companies related to the former FTX CEO Sam Bankman-Fried accounted for roughly $1 billion of the bank’s deposits. So when FTX crumbled in November, it took a blow, but still managed to survive for a number of months after selling off part of its traditional banking operations and branches.
The shutdown of Silvergate will deal a big blow to how money moves in and out of the crypto world. A few analysts weighed in with their thoughts below.
This week in web3
Crypto bank Silvergate’s ‘collywobbles’ could add to industry’s woes (TC+)
As mentioned above, Silvergate is shutting its doors, leading some analysts to forecast bigger problems for the overall ecosystem. “It is not the first bank to get the collywobbles,” Katharine Wooller, business unit director at Coincover, said to TechCrunch. “Ultimately the risk/reward ratio, in the face of increasing scrutiny, was not viable, as the ongoing crypto winter, worsened by the FTX scandal, shows no sign of thaw.”
Coinbase is ‘laser-focused’ on growing dev world and onboarding crypto-curious (TC+)
For crypto exchange giant Coinbase, 2023 is all about getting web3 into new markets and partnerships while onboarding more users into crypto, Will Robinson, VP of engineering at Coinbase, told TechCrunch. Going forward, Coinbase plans to disproportionately focus its intention and resources on capabilities around growing both on-chain and off-chain, navigating regulatory regimes, drawing in the large user base of crypto-curious people and making web3 accessible to novice or casual users, Robinson added.
Meet the women-led web3 startups from Thousand Faces’ demo day
Thousand Faces, a web3 community-based investment group, hosted its demo day on Wednesday with the top 10 startups from its Female Founder Accelerator program. The demo day coincided with International Women’s Day and featured women-led businesses focused on sustainable development goals (SDGs). The accelerator program’s first cohort accepted 30 startups from a pool of over 220 applicants across 76 countries.
Arbitrum co-founders see opportunity for continued layer-2 growth through DeFi, gaming (TC+)
As we segue into March, the Ethereum layer-2 space is continuing to see strong demand: One of its largest scaling solutions, Arbitrum, is seeing renewed exponential growth through subsectors in the ecosystem. DeFi continues to dominate most demand for L2s, but there may be other areas that could gain stronger traction, such as gaming. “In the short term, DeFi is showing the most traction,” said Harry Kalodner, CTO and co-founder of Offchain Labs, a developer of Arbitrum. But DeFi may not be the path to onboard “hundreds of millions of users,” he added.
Worldcoin, co-founded by Sam Altman, is betting the next big thing in AI is proving you are human
Fake virtual identities are nothing new and Twitter bots are nothing compared with what the world is about to experience, as any time spent with ChatGPT illustrates. Flash-forward a few years and it will be impossible to know if someone is communicating with another mortal or a neural network. Sam Altman knows this. Altman is the co-founder and CEO of ChatGPT parent OpenAI and has long had more visibility than most into what’s around the corner.
The latest pod
For this week’s episode, Jacquelyn interviewed Jack Mallers, the founder and CEO of Strike, a bitcoin-based payment network and financial app that is trying to grow cross-border payments and remittance markets. Last year, Mallers’ company raised $80 million in a Series B round to grow into that space and also has partnered with major companies like Visa, Clover and Fiserv.
Mallers is also the CEO of Zap, a bitcoin investment and payments company that transacts on the Lightning Network, which is a second layer on Bitcoin’s blockchain that allows for off-chain transactions between parties.
We discussed Mallers’ backstory, how he got into the Bitcoin scene in his late teenage years, whether the lightning network could be better than the payment networks that exist today and how big players could get into the space. This episode was heavily focused on Bitcoin, so buckle up.
We also dove into:
- Lightning Network’s global potential
- El Salvador’s adoption of Bitcoin
- Creating new infrastructure to make Bitcoin more accessible
- The future of Strike and the Bitcoin ecosystem
Subscribe to Chain Reaction on Apple Podcasts, Spotify or your favorite pod platform to keep up with the latest episodes, and please leave us a review if you like what you hear!
Follow the money
- Tensor raises $3 million for Solana-focused NFT trading platform
- Framework Ventures leads $15.8 million round in Proven
- Web3 developer tool provider Cubist raises $7 million
- Bitcoin investment platform Relai valued at $20 million following $4.5 million funding round
- Stablecoin issuer ESCA raises $3 million in pre-seed funding round
This list was compiled with information from Messari as well as TechCrunch’s own reporting.
Silvergate’s shiny hinges have rusted as the crypto bank plans to shut down by Jacquelyn Melinek originally published on TechCrunch
Source : Silvergate’s shiny hinges have rusted as the crypto bank plans to shut down
