Crypto-friendly Silvergate Bank resolved the last of its wire transfer issues Tuesday morning, said CEO Alan Lane. 

Early Friday morning, the bank was unable to process wire transfers for clients because of an outage at bank payments processor Finastra. Silvergate, like most community banks, uses Finastra’s cloud data centers as opposed to hosting those centers on the bank’s premises. When Finastra detected anomalies in their systems as a potential cyberattack, the service provider shut down its system, cutting off wire transfers for Silvergate’s customers. 

According to Lane, the La Jolla, Calif.-based Silvergate was one of the first banks on Finastra’s network that became fully operational. Finastra did not respond to request for comment. The bank is one of the few banks in the U.S. totally focused on the cryptocurrency industry, with 804 clients in the digital currency space.

The Silvergate Exchange Network (SEN) was uninterrupted and customers that had funds already on the platform were able to trade, Lane said.

By Thursday, the bank was already 90 percent remote, but the wire desk and technology support team were in the office when the outage occurred. (Bankers are still considered essential workers under California’s statewide shelter-in-place order. Silvergate’s staff is now working completely from home.)

Any of the large crypto exchanges or over-the-counter (OTC) trading desks that had integrated with Silvergate through an application programming interface (API) came online early yesterday morning. 

“We have been working on updating our SEN portal so that ultimately at some point this year, all of our customers will be able to access the API version through a portal without having to go through online banking,” Lane said. 

Despite a crash in both equities and bitcoin, Silvergate remains well-capitalized. At the end of 2019, it’s Tier 1 leverage ratio was 11.4 percent, double the 5 percent ratio that regulators require, according to its fourth-quarter earnings report. The bank’s total risk-based capital ratio is 26.5 percent compared to the 10 percent required. 

“Silvergate is very strong, liquid and well-capitalized,” Lane said. “The issue we experienced was with a third-party service provider who worked with us around the clock, and everything is working again and we’re open for business.”

Disclosure Read More

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Products You May Like

Articles You May Like

New Peer to Peer Exchange Provides Africans with an Alternative to Paxful
Explosive Defi, Stablecoin Activity Send Ethereum Fees Above Bitcoin
Dogecoin 140% Joke Rally Goes Serious with Perpetual Contract Launch
Japanese Broker Monex Launches Crypto-Based CFDs With 2x Leverage
Crypto Management App Denies Being Hacked
Bitcoin Daily Chart Indicates Crucial Bullish Breakout Towards $10,000

Leave a Reply

Your email address will not be published. Required fields are marked *