Silvergate’s shiny hinges are rusting as the crypto bank plans to close

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On Wednesday, Silvergate Capital, a publicly traded crypto bank, shared that it would “wind down and voluntarily liquidate” its banking division.

The California-based firm’s move followed a run that resulted in asset sales at a huge loss to cover more than $8 billion in withdrawals amid the broader collapse of the crypto ecosystem.

The institution, which was one of the few banks to act as an intermediary for institutional crypto, is yet another victim of the “crypto winter” following the implosion of FTX, which the bank used to transfer client funds.

It’s also worth noting that FTX and other companies associated with former FTX CEO Sam Bankman-Fried accounted for about $1 billion of the bank’s deposits. So when FTX crumbled in November, it took a beating but still managed to survive for several months after selling some of its traditional banking operations and branches.

The closure of Silvergate will deal a major blow to the way money moves in and out of the crypto world. A few analysts weighed in with their thoughts below.

This week in web3

Cryptobank Silvergate’s ‘collywobbles’ could add to industry woes (TC+)

As mentioned above, Silvergate is closing its doors, leading some analysts to predict bigger problems for the overall ecosystem. “It’s not the first bank to get the collywobbles,” Katharine Wooller, business unit director at Coincover, told CoinTech. “Ultimately, despite increasing scrutiny, the risk/reward ratio was not viable as the ongoing crypto winter, exacerbated by the FTX scandal, shows no signs of thaw.”

Coinbase is ‘laser-focused’ on growing developing world and onboarding crypto-curious (TC+)

For crypto exchange giant Coinbase, 2023 is all about getting web3 into new markets and partnerships while bringing more users to crypto, Will Robinson, VP of engineering at Coinbase, told CoinTech. Going forward, Coinbase plans to disproportionately focus its intent and resources on opportunities around both on-chain and off-chain growth, navigating regulatory regimes, attracting the large user base of crypto-curious people, and making cryptocurrencies accessible. web3 for novice or occasional users, Robinson added.

Meet the women-led web3 startups from Thousand Faces Demo Day

Thousand Faces, a web3-based investment group, hosted its demo day on Wednesday featuring the top 10 startups from its Female Founder Accelerator program. Demo Day coincided with International Women’s Day and showcased women-led companies focused on Sustainable Development Goals (SDGs). The first cohort of the accelerator program accepted 30 startups from a pool of more than 220 applicants in 76 countries.

Arbitrum Co-Founders See Opportunities for Further Layer-2 Growth Through DeFi, Gaming (TC+)

As we head into March, the Ethereum layer-2 space continues to see strong demand: One of the largest scaling solutions, Arbitrum, is seeing renewed exponential growth through sub-sectors in the ecosystem. DeFi continues to dominate most demand for L2s, but there may be other areas that can gain traction, such as gaming. “In the short term, DeFi is showing the most traction,” said Harry Kalodner, CTO and co-founder of Offchain Labs, an Arbitrum developer. But DeFi may not be the path to getting “hundreds of millions of users” on board, he added.

Worldcoin, co-founded by Sam Altman, is betting that the next big thing in AI will prove you’re human

Fake virtual identities are nothing new and Twitter bots are nothing compared to what the world is about to experience, as any time spent with ChatGPT illustrates. Flash forward a few years and it will be impossible to know if someone is communicating with another mortal or a neural network. Sam Altman knows this. Altman is the co-founder and CEO of ChatGPT parent OpenAI and has long had more insight than most into what’s around the corner.

The latest pod

For this week’s episode, Jacquelyn interviewed Jack Mallers, the founder and CEO of Strike, a bitcoin-based payments network and financial app that’s trying to grow cross-border payments and remittance markets. Last year, Mallers’ company raised $80 million in a Series B round to grow in that space and also partnered with big companies like Visa, Clover and Fiserv.

Mallers is also the CEO of Zap, a bitcoin investment and payments company that trades on the Lightning Network, a second layer on Bitcoin’s blockchain that enables off-chain transactions between parties.

We discussed Mallers’ backstory, how he got into the Bitcoin scene in his late teens, whether the lightning network could be better than the payment networks that exist today, and how big players were able to enter the space. This episode focused heavily on Bitcoin, so brace yourself.

We also dove into:

  • The global potential of Lightning Network
  • El Salvador’s Bitcoin Adoption
  • Creating new infrastructure to make Bitcoin more accessible
  • The Future of Strike and the Bitcoin Ecosystem

Subscribe to Chain Reaction on Apple Podcasts, Spotify or your favorite pod platform to stay up to date with the latest episodes, and leave a review if you like what you hear!

Follow the money

  • Tensor raises $3 million for Solana-focused NFT trading platform
  • Framework Ventures leads $15.8 million round in Proven
  • Web3 developer tool provider Cubist raises $7 million
  • Bitcoin investment platform Relay worth $20 million after a $4.5 million funding round
  • Stablecoin issuer ESCA raises $3 million in pre-seed funding round
  • This list was compiled using information from Messari and CoinTech’s own reporting.

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