Silvergate Capital (NYSE:SI) recently disclosed that it will discontinue its crypto payments platform, Silvergate Exchange Network (SEN). The decision comes after the crypto bank raised doubts about its ability to continue as an ongoing concern.
“Effective immediately Silvergate Bank has made a risk-based decision to discontinue the Silvergate Exchange Network. All other deposit-related services remain operational,” the company stated.
The SEN platform allows Silvergate’s cryptocurrency and institutional investor clients to transfer dollars throughout the year between their own accounts and the accounts of other Silvergate clients.
Silvergate witnessed a major setback last week. The stock tanked about 63% over the last two trading days after it explained that the filing of its annual report would be delayed, while it evaluated its viability.
One of the reasons for the delay is a loss incurred in the sale of additional debt securities earlier this year, which impacted the bank’s capital levels. Furthermore, Silvergate is being investigated by bank regulators and the U.S. Department of Justice.
Following this news, several crypto firms, including Coinbase Global (COIN), Galaxy Digital, and Paxos Trust Co., stopped accepting or initiating payments through Silvergate.
Is SI Stock a Buy?
Following the collapse of the FTX exchange less than four months ago, the crypto world is facing the risk of a major firm’s downturn. Currently, Wall Street is sidelined on Silvergate stock.
SI stock has a Hold consensus rating based on one Buy, seven Hold, and three Sell recommendations. The average price target of $12.40 implies an upside potential of 114.9%.
