- NFT studio Dapper withdrew their ACH option, as Circle removed the functionality.
- Circle blames Silvergate’s ill-financial health as the USDC issuer removes funds from the crypto bank.
Dapper, the NFT studio halted (ACH), citing payments partner Circle has removed the functionality. Now, only wire transfer is the option left with the users. The creator of Cryptokitties Dapper and Circle joined hands in September 2020, facilitating all Dapper account holders with buying and selling digital collectibles using credit or debit card that gets settled in USDC.
Dapper Labs, Circle & Silvergate – The Chain of events
The crypto-focused Silvergate Bank (SI) has been facing serious troubles lately. Since their exposure with the now-bankrupt exchange FTX came out, their shares fell dramatically. They are facing three separate lawsuits; expect regulatory actions; financial health is depleting, and major partners and associates are leaving the ship before it drowns. Circle, Coinbase, Paxos and Crypto.com are among many who left.
The issuer of stablecoin USDC, Circle, can be seen moving their deposits away from Silvergate and to their other banking partners. According to a press statement by Corcle on March 4, 2023, the issuer said the decision was because of the bank’s uncertainty. The priority now is the protection of reserve funds backing USDC, and if it means breaking up with Silvergate, so be it.
Last Friday, Silvergate announced shutting down its flagship product, the Silvergate Exchange Network (SEN), effective immediately. This product was their USP, for depositors to bring funds to the bank. This abrupt discontinuation can be associated with the ill-financial health of the bank, coupled with the regulatory and legal action being faced by the bank.
How did Silvergate affect Circle & Dapper?
Circle has already been moving their USDC backing funds from Silvergate elsewhere. This forced them to discontinue some of the services offered to their partner. Dapper has been in partnership with Circle since September 2020, and the chain of events has caused Dapper to discontinue their ACH services. However, Dapper confirmed supporting withdrawals through wire transfers, reducing their fee to $9.
To clear the air, Circle says that the regular operations would continue to work while they are looking for other banking partners for the resumption of affected services. In a statement, they said:
“We are communicating with customers and have taken steps to ensure access to customer funds via alternative payment and redemption channels.”
Silvergate Capital – Financial Health
At the time of writing, SI traded at $5.41 with a correction of 6.24%. Previous close and open were at $5.77 and $5.35, respectively. While the fifty-two-week change is negative 94.59%, the profit margin currently is 0.00%. Bank’s revenue was negative $833.08 million with a drop of 1719.15%, and net income dropped by 4995.65% to $1.05 billion. EPS dropped by 27.27% to $0.48. The operating expenses climbed by 82.03% to $41.06 million.
Disclaimer:
The views and opinions stated by the author, or any people named in this article, are for informational purposes only and do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2023/03/07/dapper-undo-ach-withdrawal-option-circle-silvergare-at-fault/