US Financial Institution Silvergate Bank adds 59 New Customers in Fourth Quarter; Deposits Down by 8 Percent
One of the US financial institutions Silvergate Bank that is an active supporter of cryptocurrency and its businesses has on-boarded 59 new crypto clients in the fourth quarter of 2018; however the deposit from the sector is down by 8 percent, news as per the latest filing with the United States Securities and Exchange Commission (SEC).
The filing with the SEC, as of December 31 announces that Silvergate a San Diego based bank had nearly 542 customers related to virtual currency in the industry which consist of cryptocurrency exchange and miners, international investors in digital assets, custodians and others. As of September 2018, the Silvergate Bank had around 483 cryptocurrency clients, and the crypto clients grew by 59 during its first filing that went public a year ago.
Until December 31, there were 232 cryptocurrency clients who were part of different stages of onboarding process of the bank’s customer and also of regulatory compliance.
According to the reports, two exchanges were noticed by the bank in the fourth quarter of 2018; 33 companies and 24 investors among its new clients which included blockchain protocol developers, service providers, and cryptocurrency miners
The Silvergate Bank further said it considers that the digital currency will be accepted by the traditional financial institutions and will continue to grow, further quoting the data as-
“As of now, there are more than 300 institutional investment funds with average calculated assets from 7.5 billion dollars to 10 billion dollars under the management. From December 31st, 2013, onwards more than 8.3 billion dollars has been invested in virtual currency projects apart from initial coin offering funding. Within 12 months which ended on June 30, 2018, approximately 1.3 billion dollars was generated in venture funding in the virtual currency and blockchain market.”
In the SEC filing, it was for the first time that Silvergate had identified some of the clients, some of them did not know publicly to be the customers of the bank like Kenetic and Polychain Capital investment funds, Genesis Trading a Market maker.
According to the latest reports announced has mentioned that the bank has worked closely with bitcoin wallet provider Xappo, crypto startup Paxos and Circle and exchanges like Gemini, Kraken, Bitstamp, Bittrex, and bitFlyer.
Across the year, the deposits obtained by Silvergate from cryptocurrency clients had grown by 150.4 million dollars or increased by 11.4 percent. Digital currency investors’ deposit also noticed growth and was up by 4.8 million dollars from 577.5 million dollars. Meanwhile, balances of other startups’ were high by 46.4 million dollars which reached at 273.9 million dollars.
Regardless of the growth in crypto customers, the amount held by the crypto customers in their Silvergate bank accounts of US dollar fell by 123 million dollars during the fourth quarter of 2018, to 1.470 billion dollars on December 30, from $1.593 billion as on September 30.
The decline was completely from the exchange category, wherein the account balances dropped by $174.4 million, to $618.5 million. Crypto based businesses are not only the key customers of the Silvergate; they also hold 13.1 percent of stake in the bank stock.