• Silvergate Bank’s parent company announced it would shut down and liquidate the crypto bank.
• Alameda Research is suing Grayscale Investments and its owner, the Digital Currency Group.
• The Wall Street Journal made allegations about Tether ‘stale’ activities.
Silvergate Bank to Liquidate
Silvergate Capital Corporation announced on March 8 that it would unwind its operations and liquidate its remaining assets due to “recent industry and regulatory developments.” Silvergate had been negotiating with the Federal Deposit Insurance Corporation (FDIC) to avoid a shutdown but those talks went nowhere. Companies like Coinbase, Paxos, Gemini, Galaxy Digital and BitStamp cut ties with Silvergate in light of the meltdown of FTX and regulators investigating the bank’s alleged involvement in Sam Bankman-Fried’s doomed empire.
Alameda Research Suing DCG
Bankrupt Alameda Research has filed a lawsuit against Grayscale Investments and its parent company, Digital Currency Group (DCG). The lawsuit alleges that Grayscale charged over $1.3 billion in management fees which violates trust agreements and hindered shareholders from redeeming their shares. The suit seeks to “unlock” $9 billion in locked-up funds while claiming compensation for damages caused by DCG’s actions.
Tether Allegations by WSJ
The Wall Street Journal has recently made allegations about Tether engaging in ‘stale’ activities such as not fully backing its USDT stablecoin with U.S dollars or commingling customer funds with company reserves. Tether responded by saying these claims were false, misleading or misinformed. They further added that they have complied with all applicable laws including regular audits confirming full dollar reserves at all times since inception in 2014 .
Impact on Bitcoin Price
Negative headlines surrounding Silvergate dragged Bitcoin’s price below $20,000 after it had reached an all-time high of nearly $42K just weeks prior. With news of more crypto companies being shut down as well as lawsuits pending against major players like DCG, investors are wary of investing in cryptocurrency again anytime soon.
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