cryptocurrency exchanges and institutional investors. The network was launched in 2017 and has since become a popular choice for cryptocurrency firms looking for a reliable banking partner.
The decision to shut down SEN comes after several major cryptocurrency firms, including Coinbase, Gemini, Paxos, and Circle, withdrew their banking relationships with Silvergate Bank. The move was reportedly due to concerns over the bank’s risk management practices and compliance procedures.
In a statement, Silvergate Bank CEO Alan Lane said that the decision to discontinue SEN was a difficult one, but ultimately necessary to ensure the safety and soundness of the bank’s operations.
“We understand that this decision may be disruptive to some of our clients, but we believe it is the right thing to do in order to maintain the highest standards of risk management and compliance,” Lane said.
Despite the discontinuation of SEN, Silvergate Bank will continue to offer other deposit-related services to its clients, including wire transfers, ACH transfers, and remote deposit capture.
The news of Silvergate Bank’s decision to shut down its cryptocurrency payments network comes amid growing regulatory scrutiny of the cryptocurrency industry. Earlier this week, the U.S. Securities and Exchange Commission (SEC) announced that it was delaying its decision on whether to approve a Bitcoin exchange-traded fund (ETF) proposed by VanEck and SolidX.
The SEC has repeatedly expressed concerns over the lack of investor protections in the cryptocurrency market, and has been hesitant to approve any ETFs that would allow retail investors to gain exposure to Bitcoin and other digital assets.
As the cryptocurrency industry continues to evolve, it remains to be seen how banks and other financial institutions will adapt to the changing regulatory landscape. For now, Silvergate Bank’s decision to discontinue its cryptocurrency payments network serves as a reminder of the challenges facing the industry as it seeks to gain mainstream acceptance.
