Silvergate Bank announced in March 2023 that it will voluntarily liquidate its assets and wind down operations. Its wind-down and liquidation plan includes full repayment of deposits. We will leave the article below as it is for future reference.
Silvergate Bank is a US crypto friendly bank that provides a crypto banking service to cryptocurrency businesses including crypto exchanges, institutional crypto investors, crypto mining firms, commercial customers, and software developers. Silvergate Bank is a member of the Federal Reserve System.
Business Bank Accounts for Cryptocurrency Businesses
- Cryptocurrency businesses struggle to find ideal banking solutions all over the world. Apart from Silvergate Bank, BankProv and Wirex are good options for yo to open business bank account for your cryptocurrency business in the United States.
- We have also reviewed the best crypto business bank accounts in the UK, EU/EEA, USA, Australia, and other parts of the world.
- In another article, we have reviewed best crypto friendly banks for consumers.
Silvergate Bank Crypto Solutions
The Silvergate crypto bank offers several products and solutions to its clients. The bank does not trade cryptocurrency itself but it provides solutions such as fund transfers, deposit services, customer account controls and security to enable trading and transactions.
The Silvergate Exchange Network (SEN)
Silvergate Bank offers a real-time payments system called the Silvergate Exchange Network (SEN) to its cryptocurrency customers. The SEN allows users on the network to conduct transactions instantly in U.S dollars and euros at any time of the day between their Silvergate accounts and the accounts of other Silvergate clients. The transactions are done via Silvergate’s proprietary API or their online banking portal. With the U.S banking system not operating on a real-time payments system, the Silvergate SEN comes in to help those trading cryptocurrencies to enable them trade at all times. The platform acts as an intermediary between currency exchanges with investors looking to trade crypto.
Silvergate also aims to provide a stablecoin (a coin designed to maintain a fixed $1 price) based on the assets it acquired from Diem. The crypto bank will make money on the stablecoin by charging a fee for creating every stablecoin it issues and from charging retailers transaction fees. Silvergate will also earn money on interest off the U.S dollar reserves it holds in support of the stablecoin.
How SEN Works
Institutions or crypto traders who want to trade crypto with Silvergate will first need to open an account at the bank. Then, when they trade cryptocurrency on any trading platform that has partnered with Silvergate, the exchange platform handles the crypto exchange while Silvergate transfers the dollars into its client accounts.
Silvergate Exchange Network Leverage (SEN Leverage)
Silvergate Exchange Network Leverage is Silvergate’s collateralized lending program through which institutional investors receive a crypto backed U.S dollar financing by entering into a loan agreement with Silvergate. The way the SEN Leverage program works, Silvergate is in partnership with leading digital currency exchanges that will store cryptocurrencies. Therefore, through SEN Leverage, Silvergate will issue crypto backed loans.
Silvergate Bank Institutional Custody
Silvergate Bank is a well-qualified digital assets custodian that has served institutional investors since 2013. Silvergate Bank’s custody solution meet the highest security and regulatory standards to help you safeguard and store your Bitcoin and other digital assets in a segregated cold storage account. Silvergate’s institutional custody also features record-keeping by a qualified custodian and monthly account statements. This custody solution provides a foundation for Silvergate’s comprehensive banking platform.
Silvergate Banking APIs
To run your business efficiently, you will need tools that provide access to financial information and the ability to automate many business processes. As such, Silvergate offers banking APIs– RESTful JSON APIs to its clients. These APIs are designed to give full access to your data: enable you to inquire on extensive wire data to attribute deposits, cross reference account histories, automate accounting tasks, transfer money 24/7, and understand payment patterns.
Digital Currency Exchanges/Brokers that Work with the Silvergate Crypto Bank
The Silvergate Bank works with most known digital currency exchanges with an understanding of regulatory compliance to ensure safe and secure transactions. These currency exchanges or brokers also accept Silvergate Bank deposits. They include Kraken, Coinbase, Gemini, Binance, Bitstamp, Paxos, Circle, CoinList, and more.
Other Silvergate Bank Services
Apart from digital currency services, Silvergate Bank also offers other financial services that include commercial banking, commercial and residential real estate lending, cash management solutions, business lending, and mortgage warehouse lending.
Silvergate Bank Fees
Silvergate Bank does not charge a fee for any incoming wire transfers to an account nor does it charge for withdrawing from your trading account. The fees you will encounter are third-party broker processing fees. The few fees you will encounter are verification of deposit fees ($10), domestic outgoing wire transfer fees ($10), and international outgoing wire transfers ($30). Here’s the full list of Silvergate Bank fees.
Silvergate Bank Crypto Customer Service
During standard working hours, Silvergate Bank customers can contact the Silvergate Bank headquarters via telephone, online email request, or post to their US address. Weekend or after-hours support is only available to customers with debit card issues and inquiries at +1 800 554 8969. For new loan inquiries, call +1 800 595 5856 and +1 800 595 5856 for loan servicing.
Is Silvergate Bank Safe to Use?
Yes. Silvergate Bank gives priority to its security. It is regulated by the Federal Reserve and is also a member of the Federal Deposit Insurance Corporation (FDIC), meaning account holders’ funds are insured.
Silvergate Crypto Bank Alternatives
Depending on your crypto needs, Silvergate Bank may not be the best choice for you. You can check out the following alternatives:
- Signature Bank
- Vast Bank
- Kraken (to be launched in 2022)
Read our previous review of BankProv: Bank Account for Cryptocurrency Businesses
Final Thoughts on the Silvergate Bank Crypto Review
Silvergate Crypto Bank started off as a small bank both in client size and transaction volume. Since its launch, it has doubled its client base and transaction volume from $1.5 billion in 2018 to $14 billion in 2021. An explosive growth is expected in the coming years as Silvergate continues to offer banking services to cryptocurrency businesses in the United States.