DACM Turns to Swiss Banks Post Silvergate Collapse

DACM Seeks New Banking Partnerships

Digital Asset Capital Management (DACM), managing a $400 million crypto fund, is actively seeking new banking partners in Switzerland. This shift comes in response to the collapse of Silvergate Capital's payment network, which DACM previously relied on for transferring funds to exchanges.

Silvergate's Network Collapse

Silvergate Capital, a US lender, has faced significant challenges, leading to its payment network's downfall. The network's collapse has created a gap in DACM's operational processes, prompting the search for reliable banking alternatives. Silvergate's recent exposure to the bankrupt FTX crypto exchange exacerbated the situation, causing its shares to plummet by 50%.

Impact on Crypto Transactions

The disruption has particularly affected the seamless transfer of funds to platforms like Coinbase. With Silvergate no longer supported by major exchanges, including Coinbase, Crypto.com, and Gemini, DACM's ability to move money swiftly has been hindered. This shift necessitates finding banks capable of handling crypto transactions, even if they are not exclusively focused on digital assets.

Swiss Banks as Potential Partners

DACM is currently in discussions with Swiss banks, which have a reputation for handling digital assets. Notable institutions include Sygnum Bank AG and SEBA Bank AG. These banks could provide the necessary infrastructure for DACM to continue its operations without the Silvergate network.

Broader Crypto Market Effects

The fallout from Silvergate has also impacted the broader crypto market. Following the news, cryptocurrencies like Bitcoin and Ethereum experienced price declines. The negative sentiment extended to altcoins such as Cardano, Polygon, and Solana, which showed a downturn in their weekly performance.

DACM's strategic move to explore Swiss banking partnerships underscores the need for stable financial networks in the volatile crypto landscape. As the industry adapts to these changes, securing reliable banking relationships remains crucial for continued growth and stability.