According to a statement by Silvergate Capital, the client deposits of the crypto bank placed on BlockFi accounts, which yesterday filed for bankruptcy, do not exceed $20 million, and the landing platform itself does not participate in the SEN Leverage program.
BlockFi and eight subsidiaries filed for Chapter 11 bankruptcy yesterday. The company has more than 100,000 creditors, and its assets and liabilities are valued at between $1 billion and $10 billion.
Silvergate has called the risks associated with the placed funds “minimal”:
“BlockFi does not act as custodian for Bitcoin-collateralized SEN Leverage loans, which are still valid today with zero losses and no forced liquidations. Silvergate has no investment in the platform.”
A bank’s spokesperson has stated that the entity “retains the pre-emptive right and security interest in the cash-collateralized account holding $10 million in favor of Silvergate Bank for supporting BlockFi’s ACH service.”