Located in California, Silvergate Bank, a subsidiary of Silvergate Capital, has fully explained its connection with the cryptocurrency industry during the filing of its Initial Public Offer with the Securities and Exchange Commission (SEC).
Silvergate Bank which has positioned itself as ‘’the banking platform for innovators’’ stated this in a November 16 S-1 document release, which it presented to the Securities and Exchange Commission. A 2018 third quarter report revealed that the Bank now serves over 480 crypto based startups customers, with a combined interest free deposit of almost $1.8 billion.
This recent number has shown that company has attracted a lot more customers since September 2017 when it had just 114 customers. That’s a growth of rate in excess of 320 percent.
Many of the bank’s esteemed clients are cryptocurrency exchanges, with combined deposits of $793 million. Then, there are investors like VC funds and Hedge funds directly focusing on crypto assets with combined deposits of $573 million as well as other financial companies which includes new protocol developers and miners with a deposit of over $200 million.
An official statement from the bank reads thus:
‘’The major source of our funding is being gotten from interest free deposits that is associated with customers that ply their trade within the digital currency industry’’.
The bank’s statement also added that the particular exclusive source of funding provides a huge advantage over conventional banking organizations.
With this, the statement therefore concluded that those interest free deposits are in turn, invested into earning interest at other financial institutions and security houses, including some lending programs that provides a profitable financial cover against any risk.
By taking advantage of its crypto dealings, the organization has created its personalized cryptocurrency set up or structure, aptly known as the Silvergate Exchange Network (SEN). This is a system which includes investors and digital exchanges that, according to them, ensures
“the efficient movement of U.S. dollars between participating digital currency exchanges and investors”.
The Silvergate Exchange Network was actually created and put to test in the year 2017 with a number of clients, where it gave access to all its clients that dealt with all forms of cryptocurrency early in 2018.
Being positive and very confident, the organization really believes that the business deals that has been set up for all crypto related financial activities are very important and has the tendency to expand, just as trade in cryptocurrency is expanding.
According to research, the adjustable trade that goes with the deposit of the approved digital currency -which is obviously connected to all cryptocurrencies- will most likely be to the tune of 30-40 billion dollars.
The purpose of its Initial Public Offer, is to raise about $50 million, followed by the bank being listed on the New York Stock Exchange (NYSE) under the SI ticker.
Another official statement from the bank reads:
‘’it is our desire to continue focusing on the ideas behind our digital currency, because we know it will shape our future direction’’.