Circle Moves USDC Reserve Deposits from Silvergate Bank Due to Ongoing Uncertainty
Circle, a U.S.-regulated money transmission and electronic stored value company, has announced that it has moved a small percentage of USDC reserve deposits held at Silvergate Bank to its other banking partners due to ongoing uncertainty at the bank. The company has stated that this process of winding down its relationship with Silvergate began last year as signs of trouble and broader crypto asset risk exposure became increasingly apparent.
The protection of reserve funds backing USDC is Circle’s top priority, and it holds all USDC reserves in several well-capitalized U.S. banks and in the Circle Reserve Fund, which currently comprises approximately 80% of USDC reserves. To further ensure the safety of its reserve funds, Circle has enlisted Deloitte to review and attest to the sum of these reserves each month, with the first of their attestations being issued today and available on Circle’s website.
Although Silvergate has indicated that its deposit-related services remain unaffected, certain services that it previously provided to the broader digital assets market have been suspended, including Silvergate’s Exchange Network (SEN), which a small number of Circle customers had used. Circle’s customer service, operations, risk management, and finance teams have already notified remaining Silvergate dependent customers of alternative options.
Circle is actively working to migrate any remaining services with Silvergate Bank and has stated that it has notified its customers of alternative options. It is reassuring to see that Circle is taking proactive steps to protect its reserve funds and ensure the safety of its customers’ assets. The company’s transparency in its decision to wind down its relationship with Silvergate and enlist the help of Deloitte to review its reserves is commendable and helps to instill trust in its customers.
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