Per Reuters

Since FTX's crash, Coinbase CEO Brian Armstrong has maintained that the effects of his actions could still continue throughout the industry. While other crypto exchanges filed for bankruptcy shortly after, Coinbase has retained its position but has recently cut transactions, including initiating payments to or from Silvergate.

On Thursday, the crypto exchange said it would stop accepting or initiating payments to or from Silvergate. This came shortly after the lender warned that it still had to evaluate whether it was capable of operating properly.

This resulted in the shares of Silvergate dropping after the announcement. Silvergate shares dropped by a whopping 45% in premarket trading, while Coinbase only saw a smaller 6% drop.

Coinbase also clarified that it only had small exposure to Silvergate and had minimal involvement, which would not affect its operations. The decision came shortly after the latter's delayed annual report was revealed.

Silvergate delayed its annual report, which shared how it sold more debt securities to be able to pay its debts in 2023. The report also shared how further losses could result in them becoming "less than well capitalized" and that they were evaluating the events' impact on their ability.

Silvergate said it saw a $1 billion loss in Q4 as many investors tried to withdraw their deposits. This came shortly after FTX's bankruptcy, which caused investors in other crypto-related firms to pull out their money.

Coinbase CEO Brian Armstrong believed that the FTX effect has not yet ended and that it would be a black eye for the crypto industry. Surely enough, other major firms like BlockFi, Celsius Network, Voyager Digital, and Three Arrows Capital were all affected by the fall of FTX.

In November, Brian Armstrong called for more regulations in the crypto industry to avoid the situation with FTX, where billions of investor funds were lost, from happening again.

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Reuters