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MicroStrategy Says It Doesn’t Have Any Assets Custodied With Silvergate
The company did receive a $205 million loan from Silvergate in March 2022, but MicroStrategy said the loan terms wouldn’t change in case of insolvency.
By Helene Braun
Updated May 9, 2023, 4:09 a.m. Published Mar 2, 2023, 8:42 p.m. 2 min read
Business software company MicroStrategy (MSTR) said it has no assets custodied with Silvergate Capital (SI) and is in no other way financially linked to the bank other than a commitment to repay a loan in 2025, the company said on Thursday.
“There are market concerns regarding Silvergate’s financial condition,” MicroStrategy said in a tweet, referring to fears that the crypto–focused bank may not be able to continue as a “going concern” after it had to delay its 10-K filing. “Our bitcoin collateral isn’t custodied with Silvergate and we have no other financial relationship with Silvergate.”
The terms of a $205 million loan between MicroStrategy and Silvergate Bank, a subsidiary of Silvergate Capital, also won’t change in the face of the bank’s inability to publish its annual report in which it will report further losses.
MacroStrategy, MicroStrategy’s subsidiary that handles its bitcoin purchases and holdings, received a $205 million loan from Silvergate Bank in March 2022 through its Silvergate Exchange Network (SEN) Leverage program. The loan is due in the first quarter of 2025 and that timing will not change, the company wrote in its tweet.
“We have a loan from Silvergate not due until Q1 ‘25,” MicroStrategy said. “For anyone wondering, the loan wouldn’t accelerate because of Silvergate’s insolvency or bankruptcy.”
Multiple crypto companies, including Coinbase, Paxos, Galaxy Digital and Kraken, have ended their relationships with the bank following its filing news on Wednesday.
Shares of Silvergate were down 57% on Thursday.
Read more: Silvergate Stock Drops Over 50% as Crypto Clients Flee Beleaguered Bank
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