- Top US lawmakers and regulators are making comments about the collapse of Silvergate Bank.
- Fears of financial retribution have been spotted by industry leaders.
The collapse of Silvergate Bank is stirring a lot of concern in the digital currency ecosystem as prominent lawmakers and regulators are now making comments about the event. Taking to Twitter to comment about the plans by the bank to unwind its operations, Senator Elizabeth Warren, known for her anti-crypto stance commented saying;
As the bank of choice for crypto, Silvergate Bank’s failure is disappointing but predictable. I warned of Silvergate’s risky, if not illegal, activity—and identified severe due diligence failures. Now, customers must be made whole & regulators should step up against crypto risk.
As the bank of choice for crypto, Silvergate Bank’s failure is disappointing, but predictable. I warned of Silvergate’s risky, if not illegal, activity—and identified severe due diligence failures. Now, customers must be made whole & regulators should step up against crypto risk.
— Elizabeth Warren (@SenWarren) March 8, 2023
This comment was seen as a wake-up call for firms operating in the ecosystem as it shows there might be a more impending crackdown on startups in the industry. The United States Securities and Exchange Commission (SEC), as well as the Commodity Futures Trading Commission (CFTC), are already known for their intense measures to provide oversight in the industry, prompting from US lawmakers may even drive this agenda forward more strictly.
This notion was voiced out by top analysts and crypto proponents including Scott Melker who goes by the Moniker, The Wolf of All Streets. According to him, Silvergate’s collapse is exactly what the government requires to cut off the funding from the industry.
What a hoe.
Silvergate is screwed because they had… fractional reserves. Like every other bank.
Nothing to do with crypto. https://t.co/D5kjlrA4Gj
— The Wolf Of All Streets (@scottmelker) March 9, 2023
The digital currency ecosystem has been seeing a lot of fallouts over the past year with many industry heavyweights either going bankrupt or folding up one way or another. With the latest being that from FTX and Genesis Trading, regulators are poised to be so concerned about consumers whose funds are consistently being locked up in these firms that become defunct.
It remains unclear whether there are negative casualties from the Silvergate windup but industry leaders are already calling for firms to err on the side of caution.
Silvergate bank collapse: Room for anti-crypto government staff
In his comment with respect to the ongoing FUD, pro-crypto Attorney John Deaton said that the case with Silvergate and FTX can be used as a yardstick for SEC Chairman, Gary Gensler, and Sen Warren to expand their anti-crypto agenda.
“FTX & Silvergate will 100% be conflated by @GaryGensler @ewarren & others to push their anti-crypto agenda. Warren has already made a despicable comment regarding Silvergate and she isn’t letting the truth get in the way of her narrative,” he said in a tweeted response to Scott Melker.
FTX & Silvergate will 💯 be conflated by @GaryGensler @ewarren & others to push their anti-crypto agenda. Warren has already made a despicable comment regarding Silvergate and she isn’t letting the truth get in the way of her narrative. Standby to 🤮 as they ⛽️ 💡 the 🇺🇸 people. https://t.co/7464apuyN7
— John E Deaton (@JohnEDeaton1) March 9, 2023
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It remains unclear what the fate of the industry is at the moment and the alternative bank, Signature is also experiencing a massive fall from grace, an aftermath of the ripple effect of the ongoing strain being experienced by Silvergate Bank. Despite the fears, the chances that the industry will be cut off from the banking system is quite low, at least, in the short term.
The crypto ecosystem, despite its resilience, may experience some negative price action in the next couple of days or weeks.
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