Cryptocurrency Oriented Silvergate Capital Corp S.I has set it Silvergate Exchange Networkits crypto payment network.

The company has said it made a “risk-based decision” to discontinue the service, Reuters reports.

“Effective immediately, Silvergate Bank has discontinued the Silvergate Exchange Network (SEN). All other deposit-related services remain operational,” the company said in a statement.

The SEN allows the bank’s institutional investors and digital currency customers to transfer US dollars between their Silvergate accounts and the accounts of other Silvergate customers.

“That’s a very bad sign. By waiting after hours to announce this, no more money can now be drained,” according to Bloomberg quoted J. Austin Campbell, associate professor at Columbia Business School, said.

“The good news is that many crypto people have already cut ties with and moved away from Silvergate — it’s less catastrophic than it could be,” he added.

Also read: Silvergate Capital has determined that it is unable to file its annual report with the SEC

“This is an interesting event for the crypto industry as SI has been the most highly regulated and transparent counterparty in the institutional trading market,” KBW analyst Michael Perito told Bloomberg.

Last week, Silvergate told the SEC it was evaluating its ability to continue as a going concern and said it had sold more debt at a loss this year.

The company added that further losses could mean the bank could be “less than well capitalised”.

In the last quarter Silvergate suffered casualties of $886 million from the sale of underwater securities, causing its crypto-related deposits to decline 68% quarter-on-quarter to $3.8 billion from $11.9 billion.

A US bankruptcy judge has ordered Silvergate to release $9.9 million to crypto lenders BlockFi.

The company agreed to release most of the funds in BlockFi’s reserve account within two business days.

Consequences…