Silvergate Downplays ‘Limited’ $2.5M Exposure to Bankrupt Genesis

Leading crypto bank Silvergate revealed that its exposure to the bankrupt crypto lender Genesis was less than $2.5 million as of Jan. 19, according to an official statement.

Silvergate the bankrupt lender was not a custodian for its -collateralized SEN Leverage loans. The firm added that it has no outstanding loans or investments in Genesis.

The crypto bank further assured that its exposure to Genesis was minimal, adding that its customers’ assets were securely held.

Previously, Silvergate had downplayed its relationship with the bankrupt crypto exchange FTX. The crypto bank claimed that FTX deposits accounted for less than 10% of its total deposits. However, the crypto bank processed $8.1 billion in withdrawals from clients who feared the exposure could the firm.

Meanwhile, Silvergate reported a net loss of $1 billion during the fourth quarter of 2022.

Other Firms With Exposure to Genesis

Besides Silvergate, other crypto firms exposed to the bankrupt lender have begun clarifying the exposure level.

The CEO of crypto exchange ByBit, Ben Zhou, tweeted that his firm’s exposure to Genesis was restricted to its investment arm Mirana. Zhou said Mirana’s $151 million exposure to Genesis was collateralized with $120 million that has been liquidated.

Meanwhile, Mirana’s listed contact on the court filing Jon Allen distanced himself from the filing. According to him, Mirana Asset Management and Mirana Ventures are separate sub-entities. Allen

“Mirana Ventures is not a creditor and has no exposure to this. I have no connection to Mirana AM and much of the info including the amount is incorrect. Very sloppy filing.”

Crypto project Decentralandrevealed that it has a credit of around $7.8 million against Genesis. It added that the credit was not a substantial part of its treasury.

Bankruptcy filings also showed that Stellar Network’s Foundation has a $13 million claim against Genesis. The firm reportedly called its exposure level “immaterial.”

Crypto liquidity provider Cumberland said the Genesis bankruptcy filing comprised “misleading and incorrect information.” According to the firm, it had surrendered its cash collateral and liquidated Genesis’ crypto to close an $18 million loan. Cumbersome added that this left a $46,064 balance that was due to it.