In a recent Twitter feud, the CEO of Galaxy Digital, Mike Novogratz, took a swipe at U.S. Senator Elizabeth Warren after she criticized Silvergate, the crypto industry’s bank of choice. Warren tweeted that Silvergate’s failure was disappointing but predictable and called for regulators to step up against crypto risk.
Novogratz responded by praising Warren’s intelligence and suggesting that she learn more about Modern Monetary Theory (MMT), a controversial economic theory that advocates for government spending to stimulate the economy. He also said that Bitcoin (BTC) couldn’t ask for a better partner than Warren.
The Twitter spat quickly gained attention from the crypto community, with some criticizing Warren for her negative views on the industry. One comment accused Warren of purposely lying about the industry to protect her political allies and the legacy banking system.
Another commenter congratulated Warren on causing a bank run, insinuating that her statements had led to a flight of capital from Silvergate.
The feud highlights the ongoing debate surrounding cryptocurrency and its place within the traditional financial system. While some see it as a valuable and innovative asset, others view it as a risky and potentially dangerous investment.
Warren has been a vocal critic of the industry, arguing that it poses a threat to both consumers and the broader financial system. As the crypto industry continues to grow and gain mainstream attention, it is likely that debates such as these will become more common.
Crypto Industry Lender “Silvergate” To Wind Down Operations
San Diego-based lender, Silvergate, which had become a popular bank for the crypto industry, plans to shut down its operations due to recent industry and regulatory developments, as per a report from March 8th. The disclosure caused its stock to plunge more than 30% in after-hours trading, dropping to $3 per share. Over the past few years, Silvergate has become the largest crypto bank in the U.S., with up to $14bn in customer deposits.
However, after FTX, the Bahamas-based crypto exchange, collapsed, Silvergate’s fortunes began to decline. Customers withdrew more than $8bn in the past few months, prompting the bank to sell held-to-maturity assets to fund the run, resulting in losses of $718m. According to the report, California’s state banking regulator will monitor the bank’s closure to ensure a safe and expeditious process.
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