Silvergate’s shiny hinges have rusted as the crypto bank plans to shut down

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Welcome back to Chain reaction.

On Wednesday, Silvergate Capital, a publicly traded crypto bank, said it would “terminate operations and voluntarily liquidate” its banking division.

The California-based company’s move followed a run that saw it sell assets at a huge loss to cover more than $8 billion in withdrawals amid the broader crypto ecosystem meltdown.

The institution, which was one of the few banks to have acted as a middleman in the institutional crypto space, is yet another victim of the “crypto winter” following the implosion of FTX, which used the bank to transfer customer funds.

It’s also worth mentioning that FTX and other companies linked to former FTX CEO Sam Bankman-Fried accounted for around $1 billion of the bank’s deposits. So when FTX collapsed in November, it took a hit, but still managed to survive for several months after selling off some of its traditional banking operations and branches.

The closure of Silvergate will be a major blow to the way money enters and exits the crypto world. A few analysts weighed their thoughts below.

This week in web3

Crypto bank Silvergate’s ‘collywobbles’ could add to industry woes (TC+)

As mentioned above, Silvergate is shutting down, leading some analysts to predict bigger issues for the overall ecosystem. “It’s not the first bank to have the collywobbles,” Katharine Wooller, business unit manager at Coincover, told TechCrunch. “Ultimately, the risk/reward ratio, in the face of increasing scrutiny, was unsustainable as the ongoing crypto winter, compounded by the FTX scandal, shows no signs of thawing.”

Coinbase is “laser-focused” on growing the developer world and integrating the crypto-curious (TC+)

For crypto exchange giant Coinbase, 2023 is all about weaving web3 into new marketplaces and partnerships while bringing more users into crypto, Will Robinson, vice president of engineering at Coinbase, told TechCrunch. Going forward, Coinbase plans to disproportionately focus its intent and resources on both on-chain and off-chain growth capabilities, navigating regulatory regimes, appealing to the large user base of crypto people -curious and make web3 accessible to novice or casual users, Robinson added.

Meet the female-led web3 startups at the Thousand Faces Demo Day

Thousand Faces, a web3 community investment group, held its demo day on Wednesday with the top 10 startups from its Female Founder Accelerator program. The demo day coincided with International Women’s Day and showcased women-led businesses focused on the Sustainable Development Goals (SDGs). The first cohort of the accelerator program accepted 30 startups from a pool of more than 220 applicants from 76 countries.

Arbitrum Co-Founders See Opportunity for Continued Layer 2 Growth Through DeFi and Gaming (TC+)

As we enter March, the Ethereum layer 2 space continues to see strong demand: one of its largest scaling solutions, Arbitrum, is seeing renewed exponential growth in sub-sectors of the ‘ecosystem. DeFi continues to dominate most L2 demand, but there may be other areas that could gain traction, such as gaming. “In the short term, DeFi is showing the most traction,” said Harry Kalodner, CTO and co-founder of Offchain Labs, an Arbitrum developer. But DeFi may not be the way to onboard “hundreds of millions of users,” he added.

Worldcoin, co-founded by Sam Altman, is betting the next big thing in AI is proving you’re human

Fake virtual identities are nothing new and Twitter bots are nothing compared to what the world is about to experience, as all of our time with ChatGPT illustrates. Flash-forward a few years and it will be impossible to know if someone is communicating with another mortal or a neural network. Sam Altman knows it. Altman is the co-founder and CEO of OpenAI, parent of ChatGPT, and has long had more visibility than most on what’s happening around the corner.

The last capsule

For this week’s episode, Jacquelyn interviewed Jack Mallers, the founder and CEO of Strike, a bitcoin-based payments network and financial app trying to grow cross-border payments and remittance markets. Mallers’ company last year raised $80 million in a Series B round to expand in this space and has also partnered with big names like Visa, Clover and Fiserv.

Mallers is also the CEO of Zap, a bitcoin investment and payment company that transacts on the Lightning Network, which is a second layer of the Bitcoin blockchain that enables off-chain transactions between parties.

We discussed Mallers’ backstory, how he entered the bitcoin scene in his late teens, whether the Lightning Network could be better than the payment networks that exist today, and how the big players could enter. in the space. This episode was heavily Bitcoin focused, so buckle up.

We also dove into:

  • The global potential of Lightning Network
  • The Adoption of Bitcoin by El Salvador
  • Create new infrastructure to make Bitcoin more accessible
  • The Future of Strike and the Bitcoin Ecosystem

To subscribe to Chain reaction on apple podcast, Spotify or your favorite pod platform to follow the latest episodes, and leave us a comment if you like what you hear!

follow the money

  1. Tensor raises $3 million for Solana-focused NFT trading platform
  2. Framework Ventures leads $15.8 million round in Proven
  3. Cubist, provider of Web3 development tools, raises $7 million
  4. Bitcoin Relay investment platform valued at $20M after $4.5M funding round
  5. Stablecoin issuer ESCA raises $3M in pre-seed funding round

This list was compiled with information from Messari as well as TechCrunch’s own reports.

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