In 2013, the CEO of the Silvergate Bank Alan Lane bought his first Bitcoin. Five years later, he is on our DC Forecasts crypto news site in a report that shows how Silvergate became the leading bank for crypto startups.
Based in La Jolla, California, the bank was deposit-hungry and took on its first crypto exchange as a client in 2013 which was seen as a gutsy move for a financial institution, mostly because at the time bankers viewed Bitcoin as either a fad, a scam or a reputational and regulatory risk.
While speaking at the BlockFS conference in New York recently, Lane recalled:
“Here were these companies that were raising money from reputable [venture capital] firms. They weren’t doing anything illegal, they weren’t doing anything immoral. And yet, they were struggling to maintain bank accounts. So I put our need for deposits together with their need for banking services.”
Currently, Silvergate is a bank that has many crypto startups as clients. Some of the most prominent ones include Coinbase, Gemini, Kraken and bitFlyer. As revealed in the bank’s initial offering prospects (filed this month), there are more than 483 crypto startups working with the bank, all of which contribution roughly $1.7 billion in deposits to the balance sheet as of Q3 this year.
However, Lane admits that most of the crypto startups have had hard times since the beginnings, juggling different responsibilities which were not going to cut it for a bank or its regulators. As he said, “The chief compliance officer is not a multiple-hat type of person.”
In the early days, Silvergate set up processes for ongoing monitoring that matched up deposits with Bitcoin blockchain data. Up until today, he said that his staff might take quarterly visits to exchange offices in order to make sure they have up-to-date monitoring tools across blockchain-based assets.
“We wanted to be able to see both sides of that [bitcoin] transaction,” Lane said. “When you wire $50,000, send us the blockchain address…what we want to see on the blockchain is a transaction that matches up with that $50,000 value.”
To sum things up, Lane also said why Silvergate is slow and selective when onboarding new crypto clients.
“It’s really important that it’s done right because if we have something illegal that goes across our platform, it could be detrimental to our business and to the integrity of the system. So we’re very protective of what we built,” Lane concluded.
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"The Maker Foundation Interim Risk Team has placed an Executive Vote into the voting system, which will enable the community to enact a new Dai Stability Fee of 17.5%. The Executive Vote (FAQ) will continue until the number of votes surpasses the total in favor of the previous Executive Vote. This is a continuous approval vote," is what the announcement shared in our latest cryptocurrency news notes.If the decision is approved and the vote comes out positive, the proposal would decrease the stability fee by 2% to 17.5% per year. As the announcement outlined, the need to decrease the fee was discussed by the project's governance and now the MakerDAO token holders need to decide on it. For those of you who don't know, MakerDAO is looking to change the yearly stability fee in an attempt to improve the token's peg to the US dollar - especially after the exchange price has been hovering above the $1 level. The stability fee was a hot topic in the altcoin news and is seen as a charge that is levied by Maker participants when DAI is used for loans. In March, the MakerDAO token holders already decided to raise the stability fee (even twice), first to 3.5% and then to 7.5% per year. In April this year, this fee was further increased by another four percent in the fifth such vote this year which brought it down to 11.5%. The further votes brought the rate up to 19.5% at the beginning of the current month. As we already reported (and many best cryptocurrency news sites did too) at the end of the previous month, DAI has been struggling to maintain its peg. Aside from the MakerDAO token holders and their decisions, the president and chief operating officer claimed that DAI's value had been stabilized as of the beginning of May. On top of this, at the end of April, the chief technology officer at MakerDAO, Andy Milenius, published an open letter dated April 3 to explain his concerns over the project's internal conflicts.
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“.. instead you can use a digital asset to have global liquidity on demand now we build upon a tech stack of an open-source technology called XRP”Brad praised the digital coin of Ripple and stated that XRP is much cheaper and faster on a ‘’per transaction basis’’ than Bitcoin ever was by a ‘’thousand times.’’ According to him, global payments today are not into the age of the Internet. He also pointed out in the latest cryptocurrency news that the blockchain technology has the ability to change all of the existing payments settlements dynamics by removing the ‘’central counterparty’’ and due to its unique ability to ‘’transact without the need for trust.’’ While he was explaining the subject of interoperability, Garlinghouse said that it was an important factor and noted:
“We’re trying to solve a problem, selling technologies to banks and financial institutions to solve a cross-border payments problem.”Ripple’s CEO outlined that the company is not focused on the Central Bank Digital Currency issuance and said that interoperability is much more important. Garlinghouse argued that in a world full of central bank digital currencies, interoperability is much needed to solve the cross-border transactions dealings issue. He had earlier dismissed the JPMCoin by the financial giant JPMorgan saying that it suffers from lack of interoperability.
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