Bitfarms Ltd., a global bitcoin mining company, has announced the immediate termination of Geoffrey Morphy as president and CEO, along with his removal as a director. Following his dismissal, Morphy filed a lawsuit against the company, seeking million in damages for alleged breach of contract and wrongful dismissal. Bitfarms is set to defend against […]
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Silvergate Bank Terminates Crypto Payments Network as Shares Plunge to Record Low
Silvergate Bank has discontinued its cryptocurrency payments network. The decision to shut down Silvergate Exchange Network followed the withdrawal of banking relationships by several major cryptocurrency firms, including Coinbase, Gemini, Paxos, and Circle.
Silvergate Discontinues Crypto Payments Network
Silvergate Bank announced Friday that its cryptocurrency payments network, the Silvergate Exchange Network (SEN), has been terminated. According to a notice posted on the crypto-focused bank’s website:
Effective immediately Silvergate Bank has made a risk-based decision to discontinue the Silvergate Exchange Network (SEN). All other deposit-related services remain operational.
SEN is Silvergate’s proprietary network that allows the bank’s institutional investor and digital currency clients to transfer U.S. dollars between their Silvergate accounts and the accounts of other Silvergate clients 24 hours a day, seven days a week.
Concerns mounted over Silvergate’s financial stability and future prospects following the collapse of crypto exchange FTX. The bank claimed that as of Sept. 20, 2022, FTX represented less than 10% of its .9 billion total deposits from all digital asset customers. Nonetheless, the bank is reportedly being investigated by the U.S. Department of Justice (DOJ) over accounts tied to the disgraced FTX co-founder Sam Bankman-Fried (SBF).
On Wednesday, Silvergate informed the SEC that it is unable to file its annual report with the regulator for the fiscal year ended Dec. 31 “within the prescribed time period without unreasonable effort or expense due to the reasons described below.” The crypto-focused bank also revealed that it has sold additional debt securities at a loss this year, leading to questions about the company’s ability to operate as a going concern. The filing further states that the bank’s continued losses could result in it being “less than well capitalized.” Silvergate added:
The company is currently in the process of reevaluating its businesses and strategies in light of the business and regulatory challenges it currently faces.
After Silvergate raised concerns about its business, crypto-focused firms including Coinbase Global, Galaxy Digital, Paxos, Circle, Cboe’s digital asset exchange, Bitstamp, and Gemini suspended their banking partnership with Silvergate.
Shares of Silvergate (NYSE: SI) hit a new all-time low on Thursday, plummeting over 97% from their peak in November 2021. Last month, Silvergate became the most shorted stock in the U.S. The bank incurred a loss of billion in the fourth quarter of last year.
What do you think about Silvergate shutting down its crypto payments network? Let us know in the comments section below.
This Crypto Exchange Terminates Half Of Its Employees Amid Bear Market
The crypto world has had its fair share of drama as the bear market bites down on the entire landscape. In addition, global inflation has also caused most companies to resize their organizational structure.
Crypto businesses are now planning for effective cost-management strategies to prevent a collapse. However, the fear in the market for most crypto users is high since trusted firms have collapsed.
In light of recent events, Australian cryptocurrency exchange Swyftx has shown 90 of its employees the exit door. It represents a layoff of around 40% of the entire workforce – a significant number.
Swyftx CEO Alex Harper said the company is well-positioned to handle the blowout of the FTX storm on the crypto world.
He believes the crypto market will continue to decline in 2023. This is the reason behind the massive decrease in the workforce.
Layoffs Are Common In Crypto Exchanges
Top cryptocurrency exchanges are sizing down their teams to cut costs and prevent wearing out. Other factors have prolonged the current bear market, and this seems to be the only route to stay afloat.
Coinbase – US-based crypto giant laid off around 18% of its staff. Huobi followed suit – downsizing its staff by 30%. Popular exchange Gemini laid off 10% of its workforce in June, then recruited over 60 new people in July.
Other exchanges that include CryptCorn, BitMEX, and Bybit – reduced their numerical strength. Binance, on the other hand, was one of the few exchanges that expanded operations during the current bearish phase.
Who’s Next?
Alex Harper, the Swyftx CEO, broke the news of the layoffs in a letter addressed to employees. He referred to the staff as “90 talented friends and employees”.
He also distanced Swyftx from any association with the bankrupt exchange FTX. However, he also noted that Swyftx is not immune to the effects of such an event on the crypto market.
Harper believes that sizing down a percentage of the workforce will help the organization survive the chilly crypto winter that has claimed many victims.
According to Harper, Swyftx is one of the top crypto trading organizations; in Australia. He also stated that they are well-positioned to weather the ongoing storm in the crypto market.
All affected employees were promised severance pay within seven days to cushion the effects. Also, they will have access to an employee stock ownership plan (ESOP) for the tenure with additional six months.
The exchange will also provide them with job search support and employee assistance program (EAP) services. Unfortunately, the FTX crash continues with its devasting fallout, with some crypto exchanges filing for bankruptcy.
Featured Image From Pixabay, Charts From Tradingview.com
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Faced with EU AML Regulations, Bitcoin Social Tipping Platform Terminates Service
A popular service for tipping social network users has announced that it will cease functioning on New Year’s Eve. BottlePay links social accounts with Bitcoin wallets to allow users to reward each other for agreeable content.
The news comes in response to EU anti-money laundering regulations. BottlePay has confirmed that users will still be able to withdraw funds up until the end of the year.
Regulations Force Bitcoin Tipping Tool to Call it Quits
According to a press release published earlier today by BottlePay, the social Bitcoin tipping service, will cease to exist at the end of the year. The company cited incoming EU money laundering regulations as the reasoning behind the sudden termination.
To maintain our integrity as service providers, and to protect the interests of our users, we have taken the painful decision to shut Bottle Pay down rather than become subject to the new #5AMLD regulations.
Please withdraw funds within the next 2 weeks.https://t.co/dZltbf7vjn— Bottle Pay (@bottlepay) December 13, 2019
The custodial wallet provider is based in the UK and since the nation is in Europe, for now at least, it would need to comply with new anti-money laundering regulations coming in on January 10, 2020. BottlePay claims that the measures would require it to demand too much information from its users to continue offering a service comparable to that it currently does. Rather than transform it into something barely recognisable, the team has decided to call it quits.
Those behind the service write:
“The amount and type of extra personal information we would be required to collect from our users would alter the current user experience so radically, and so negatively, that we are not willing to force this onto our community.”
BottlePay says it has already terminated all its tipping bots on Twitter, Reddit, Telegram, and Discord. It is also not accepting new signups or deposits as of the time of the announcement. Any funds that have already been sent but not claimed will be returned to the sender within a week.
For those already using the service, withdrawals will remain online until 13:00 GMT on December 31. BottlePay will donate any funds still in wallets after this time to The Human Rights Foundation.
The company assures its existing users that any Bitcoin held in wallets is perfectly safe. It encourages its users to take down any payment page links from social profiles, to withdraw funds, and to uninstall the browser extension.
This is not the first time the evolving regulatory landscape has left cryptocurrency companies in a difficult position. When faced with a similar predicament, the once-anonymity-focused exchange platform ShapeShift alienated many of its users by introducing “know your customer” checks and identification verification.
Evidently, BottlePay is keen to not disappoint its users in such a way. It writes:
“… we feel confident we can close Bottle Pay with our heads held high, knowing that we always acted with the well being of our users foremost in our minds.”
Related Reading: Stablecoins Could Be Crypto’s True Killer App
Featured Image from Shutterstock.
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