After Silvergate announced its closure, the number of customer inquiries from Swiss bank Synnum surged

According to reports, Martin Burgherr, the chief customer officer of the Swiss-based Sygnum Bank, said in an interview that after Silvergate Capital Corporation said that it would stop operations and voluntarily liquidate Silvergate Bank, the volume of customer consultation of Syngnum increased, especially from hedge funds. Now it seems necessary to diversify the banking partners according to what has happened.

Interpretation of this information:

In recent news, Martin Burgherr, the chief customer officer of Sygnum Bank, disclosed that the announcement of Silvergate Capital Corporation’s voluntary liquidation of Silvergate Bank caused a surge of inquiries from customers, specifically hedge funds. Burgherr believes it is essential to diversify banking partners after the unprecedented news of Silvergate Bank. Sygnum Bank is a leading digital asset bank that offers a suite of services, including custody, trading, credit, and lending.

With the rise of digital currencies, the demand for crypto-friendly banking services has been on the rise. It provides investors with more options and opportunities to hold and trade digital assets. However, despite the growth in the digital asset industry, banks have been slow to accommodate these new assets. Many banks have been hesitant to offer services to digital asset companies due to compliance and regulatory risks.

Silvergate Bank was one of the few banks that took the initiative to provide services to digital asset companies. In a filing with the Securities and Exchange Commission (SEC), Silvergate Capital Corporation cited that the bank’s voluntary liquidation was due to poor financial performance and declining interest rates. While Silvergate Bank accounted for a small percentage of Sygnum’s business, it shows the fragility and uncertainty of the digital asset industry’s infrastructure.

Burgherr emphasized the need to have diverse banking partners, especially as the digital asset industry continues to mature. Diversifying banking partnerships minimizes risk exposure for digital asset companies, ensuring that they have alternative options if their primary banking partner fails. It also fosters healthy competition among banks to meet the demand of the digital asset industry.

In conclusion, the announcement of Silvergate Bank’s liquidation has triggered a flurry of inquiries from Sygnum’s customers, primarily hedge funds. This highlights the need for digital asset companies to have diverse banking partners to mitigate risks and ensure businesses’ continuity. The rise of digital assets presents a new set of challenges for banks, and they need to step up and provide the necessary infrastructure to facilitate the growth of this industry.