LedgerX Ditches Silvergate as Analysts Downgrade Stock Price

Silvergate’s share price “moved in line” with bitcoin’s performance for “most of 2021-22,” according to Kaiko analysts


Silvergate modified by Blockworks


FTX’s LedgerX, the only subsidiary of the now-defunct exchange excluded from its bankruptcy and regulatory woes, told customers it will no longer accept wire transfers from Silvergate Capital. 

In an email sent to clients Wednesday, LedgerX instructed customers to instead use Signature Bank for wire transfers from March 1 onward.

Loading Tweet..

“Silvergate made a name for itself as the bank of choice for some of the largest crypto companies, most notably working with FTX, which accounted for around 10% of crypto-linked deposits,” research analysts from Kaiko wrote in a recent note. 

The switch comes amid a challenging time for Silvergate. In the wake of FTX’s collapse, customers pulled more than $8 billion from the bank, but Silvergate was able to survive by selling assets at a loss — with help from the Federal Home Loan Bank, a lender backed by private capital that supplies lines of credit to distressed companies. 

As of the end of 2022, Silvergate held $4.3 billion of short-term Federal Home Loan Bank advances. Shares of Silvergate, which briefly rose at the end of January, are now down more than 20% since the start of the year. 

“Due to its large crypto exposure, Silvergate’s share price moved in line with BTC returns for most of 2021-22. However, its correlation has weakened significantly in 2023 due to growing legal and regulatory risks around the bank’s dealings with FTX and Alameda,” Kaiko analysts added.

Crypto derivatives shop LedgerX, acquired by FTX’s US arm in October 2021, has been notably absent from FTX’s bankruptcy filings and other legal proceedings. LedgerX, registered with the CFTC since 2017, has so far escaped unscathed. 

Regulators have used the subsidiary as an example of which crypto companies should register with appropriate authorities. 

“We require, in permitting LedgerX to operate, that LedgerX comply with a number of conditions,” CFTC Commissioner Kristin Johnson said in a November appearance after the FTX collapse. “Not $1 of customer assets have been compromised, to the best of our knowledge.”

LedgerX did not respond to Blockworks’ request for comment.

Get the day’s top crypto news and insights delivered to your email every evening. Subscribe to Blockworks’ free newsletter now.

Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from Blockworks Research’s Daily Debrief.

Can’t wait? Get our news the fastest way possible. Join us on Telegram and follow us on Google News.


upcoming event

MON - WED, MARCH 18 - 20, 2024

Digital Asset Summit (DAS) is returning March 2024. This year’s event will be held in our nation’s capital, where industry leaders, policymakers, and institutional experts will come together to discuss the latest developments and challenges in the ever-evolving world of cryptocurrency. […]

upcoming event

MON - WED, SEPT. 11 - 13, 2023

2022 was a meme.Skeptics danced, believers believed.Eventually, newcomers turned away, drained of liquidity and hope.Now, the tide is shifting and it’s time to rebuild. Permissionless II is the brainchild of Blockworks and Bankless. It’s not just a conference, but a call […]

recent research

Curve's Stablecoin and Lending Market


AMMs are at the root of everything elegant and useful in DeFi.That's why Curve put LLAMMA at the center of its lending protocol.



Criminal behavior will get you to the bottom of this list


As markets teeter with uncertainty, both gold bugs and bitcoin aficionados are perking up, spurred by murmurs of a potential change in policy


OKX has also filed to become a Digital Asset Service Provider in France, which could take up to six months, according to the company


Several firms have sought to launch leveraged bitcoin futures products, and one such company intends to launch its proposed ETF on June 13


While the rest of the crypto world is focusing on frivolous non-issues, Brazil is where developers could actually make a difference


Following community backlash, Metaplex promptly back-pedaled from initial plans, removing some, but not all of the proposed fees