Silvergate Capital Corporation was once among the most preferred banking institutions for cryptocurrency business, but the entity has faced numerous issues in the past few weeks.
The latest saw the bank closing its crypto payment service called the Silvergate Exchange Network.
“Effective immediately Silvergate Bank has made a risk-based decision to discontinue the Silvergate Exchange Network (SEN). All other deposit-related services remain operational,” reads the firm’s statement.
- The service allowed investors to complete 24/7 transfers to crypto exchanges, which was one of the most utilized products of the bank. It operated a lot faster than traditional banking wire transfers that could take days.
- However, the bank raised eyebrows earlier this week when it revealed operational issues and said it had to delay its annual report.
- Aside from its shares plunging by over 30% in hours, the announcement also prompted several crypto giants, such as Kraken and Coinbase, to dump Silvergate and its services.
- Being one of the largest players from the traditional finance industry, the news also affected the entire crypto market. Bitcoin slumped to a multi-week low at under $22,000 in a matter of hours, while the entire market cap dropped by $50 billion in a day.
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Silvergate Bank recently announced that it is closing its internal cryptocurrency payments platform, Silvergate Exchange Network (SEN). This marks the latest development in the ongoing saga between the bank and its customers over Silvergate’s customer service and support issues, which have been ongoing since 2020.
For months, Silvergate’s customers have reported a wide array of problems with their accounts, including delays in receiving payments, freezes and reversals of transactions, and difficulties withdrawing from their accounts. These customer service issues have been particularly concerning for customers hoping to trade and purchase cryptocurrency, as SEN was one of the few banks in the United States that allowed for secure and efficient cryptocurrency payments.
The company is now discontinuing its internal cryptocurrency payments platform and is instead directing customers to its third-party payment processor, PrimeTrust. Customers will still be able to purchase, transfer, and sell cryptocurrency through their PrimeTrust accounts.
Silvergate Chief Executive Alan Lane believes that these changes will help improve the customer experience moving forward. “We are confident that our new suite of products and services will better address the needs of our customers by utilizing our existing infrastructure, while simultaneously providing them with the user-friendly experience they expect,” he said.
Despite these changes, it appears that the bank’s customer service issues are far from resolved. Customers continue to report problems with deposits, withdrawals and customer support. Until Silvergate resolves its customer service issues, many customers may still be hesitant to use their services.
Silvergate Bank’s customer service and support issues are a reminder of the challenges that traditional financial institutions face when adapting to new technologies and customer demands. As the cryptocurrency markets continue to grow, Silvergate should work to ensure their customers are provided with a safe and secure experience.
