- Crypto companies are leaving Silvergate Bank in droves
- Most of Silvergate’s clients stopped using the bank’s ACH services
Circle, who processes payments for NFT company Dapper Labs, has removed Automated Clearing House (ACH) functionality.
As a result, Dapper can no longer process ACH payments, CoinDesk reported. Dapper is the firm behind popular basketball NFT game platform NBA Top Shot, among others.
ACH is an electronic funds transfer (EFT) system used for processing financial transactions in the United States. It is a network that facilitates electronic funds transfers between financial institutions, including between bank accounts with those.
Crypto firms fleeing from Silvergate
Crypto companies are fleeing from Silvergate Bank in droves. Once top choice in the sector, Silvergate Bank is now facing the wrath of regulators and significant financial troubles. Last week, the bank’s share price lost more than 50%, falling to an all-time low.
On March 1, the beleaguered institution announced it would postpone filing its annual 10-K report because it had to respond to requests from its independent accountants and auditors. They are also involved in pending regulatory and other inquiries, including related to ongoing investigations.
Coinbase, Circle, Paxos stopped using its ACH
Over the past month, most of Silvergate’s clients not only stopped using the bank’s ACH services, but also parted ways with it entirely. Among its former clients are Circle, Coinbase, Paxos, and Crypto.com.
What’s more, the bank abruptly shut down its Silvergate Exchange Network last week. Many leading companies in the crypto space had used the settlement service. This was one of the factors in Circle’s decision to stop using ACH services.
Withdrawals via wire transfer are still an option
Dapper Labs has stated they still support withdrawals by wire transfer and USDC. They will reduce the wire transfer fee to $9.
Circle’s regular operations will continue as well. They are looking for new banking partners so they can keep offering processing services. The company said in a statement:
We are communicating with customers and have taken steps to ensure access to customer funds via alternative payment and redemption channels.