Coinbase Drops Silvergate as Bank’s Shares Plunge by 50%

Coinbase, one of the largest cryptocurrency exchanges in the world, has announced that it is switching its service for Prime account holders to Signature Bank.

This move comes after recent developments and as a precautionary measure, Coinbase has stated that it is no longer accepting or initiating payments to or from Silvergate.

In a tweet, Coinbase assured its clients that their funds are safe, accessible, and available. The exchange also stated that it will be facilitating institutional client cash transactions with other banking partners and that it has taken proactive action to ensure that clients experience no impact from this change.

Coinbase has de minimis corporate exposure to Silvergate, meaning that it has minimal financial exposure to the bank. Client cash is held at FDIC-insured U.S. banks, and when a client has a large dollar balance, Coinbase stores their cash in a U.S. government money market fund to keep it safe and liquid.

The decision to switch to Signature Bank comes after cryptocurrency-friendly bank Silvergate Capital Corp. suffered a significant blow following the collapse of Sam Bankman-Fried’s FTX.

The bank’s shares plunged by as much as 50%, and it is currently studying whether it is still viable and reviewing its financial controls.