¿Qué han aprendido los bancos de la crisis de Silvergate Bank?

¿Qué han aprendido los bancos de la crisis de Silvergate Bank?

El mercado de las criptomonedas se ha visto sacudido recientemente por una importante crisis en Silvergate Bank (NYSE:SI), una institución financiera que se especializa en activos digitales. Los efectos de esta crisis han sido generalizados y han causado gran preocupación entre los inversores. Las acciones de Silvergate Bank han experimentado una fuerte caída, alcanzando un mínimo histórico de 4,86 dólares el viernes, lo que representa una caída de casi el 98% desde el cierre récord de la institución en noviembre de 2021. Como resultado, la capitalización de mercado de Silvergate Bank sufrió una pérdida total de más de 7.000 millones de dólares.

El impacto de esta crisis no se ha limitado solo a Silvergate Bank. La industria criptográfica en general también se ha visto afectada, con participantes importantes como Coinbase Global y Ebang International experimentando una caída notable de alrededor del 1% cada uno. Además, incluso las criptomonedas populares Bitcoin y Ethereum se han visto afectadas, experimentando una disminución de aproximadamente el 4,8% durante la última semana.

La crisis en Silvergate Bank comenzó cuando el banco retrasó la presentación de su informe anual. El retraso provocó una venta masiva de acciones de Silvergate, lo que provocó un efecto dominó en el criptomercado. La situación empeoró cuando Silvergate Bank anunció que había tomado una decisión basada en el riesgo de descontinuar Silvergate Exchange Network, su red de criptopagos. Esto provocó que las acciones de Silvergate cayeran casi un 50% en la bolsa de valores de Nueva York el jueves.

La caída de las acciones relacionadas a las criptomonedas es un recordatorio de que el mercado criptográfico sigue siendo muy volátil y susceptible a cambios repentinos. El hecho de que la crisis de un banco pueda tener un gran impacto en todo el mercado es preocupante. Sin embargo, vale la pena señalar que esta crisis no indica necesariamente una falla fundamental en el criptomercado. En cambio, puede ser una indicación de que algunos exponentes, como Silvergate Bank, no estaban adecuadamente preparados para los riesgos asociados con el mercado.

El incidente de Silvergate Bank destacó algunos problemas importantes con el enfoque de gestión de riesgos e informes financieros del banco. Una de las principales revelaciones de la crisis es que las deudas incobrables de Silvergate no eran sus activos sino sus depósitos. En términos simples, esto significa que Silvergate había estado utilizando los depósitos de sus clientes para invertir en activos de riesgo en lugar de mantener esos depósitos en inversiones más seguras y estables. Esta es una señal de alerta importante para cualquier banco, y se refiere particularmente al contexto de un banco que se enfoca en activos digitales y criptomonedas.

Se ha hecho evidente que Silvergate, una institución financiera que se ocupa de activos digitales, no estaba adecuadamente preparada para manejar el mercado volátil. Como resultado, sus clientes e inversores han sufrido pérdidas significativas. Para evitar tales situaciones, la gestión del riesgo es fundamental para tratar con activos digitales y criptomonedas. Los bancos deben permanecer atentos a la hora de identificar, evaluar y mitigar los riesgos potenciales. Hay varias áreas clave que los bancos deben considerar en su enfoque de gestión de riesgos.

En primer lugar, los bancos deben identificar varios riesgos de los activos digitales y las criptomonedas, incluidos los riesgos de mercado (como la volatilidad de los precios), los riesgos operativos (como las infracciones de seguridad), los riesgos legales y regulatorios (como el cumplimiento de las normas AML y KYC) y los riesgos reputacionales (como publicidad negativa). Una vez que se han identificado los riesgos, los bancos deben evaluar el impacto potencial y la probabilidad de cada riesgo.

Este enfoque permitirá a los bancos priorizar los riesgos y asignar los recursos en consecuencia. Los bancos deben tomar medidas para mitigar los riesgos mediante la implementación de medidas de seguridad sólidas, la diligencia debida con los clientes y las contrapartes y la diversificación de sus carteras de activos digitales. Asimismo, las instituciones financieras deben monitorear los riesgos continuamente y ajustar sus estrategias de gestión de riesgos en consecuencia. Esto puede implicar el uso de métricas de riesgo, la realización de pruebas de estrés y mantenerse actualizados sobre los desarrollos de la industria.

Junto con la gestión de riesgos, también deben considerar cómo informar sus libros cuando se trata de activos digitales y criptomonedas. Necesitan informar con precisión sus tenencias y transacciones en tiempo real porque el valor de estos activos puede cambiar rápidamente. Esto puede requerir un software de contabilidad especializado y el desarrollo de procesos internos para rastrear y reportar transacciones de activos digitales. Además, seguramente los bancos deban adaptar sus prácticas de informes para reflejar las características únicas de los activos digitales y las criptomonedas.

Por ejemplo, es posible que los bancos deban informar sobre los activos digitales específicos que poseen y los riesgos particulares asociados con esos activos. Probablemente, también deban proporcionar divulgaciones más detalladas sobre sus tenencias y transacciones de activos digitales para garantizar la transparencia con los clientes y los reguladores. Las prácticas de gestión de riesgos e informes son vitales para los bancos que se ocupan de activos digitales y criptomonedas. Los bancos deben identificar, evaluar y mitigar los riesgos de manera proactiva mientras desarrollan sólidas prácticas de informes que reflejen con precisión sus tenencias y transacciones de activos digitales.

En última instancia, la crisis del banco Silvergate sirve como advertencia tanto para los bancos como para los inversores. Destaca la necesidad de una adecuada gestión de riesgos, informes financieros y diversificación, particularmente en el contexto de los activos digitales y las criptomonedas. Si bien el mercado de las criptomonedas y los activos digitales sigue siendo volátil e impredecible, aquellos que estén preparados para tomar las precauciones necesarias e invertir sabiamente aún pueden tener éxito y crecer en esta industria emocionante y en rápida evolución.

En tiempos de crisis, es fundamental recordar la importancia de la diversificación. Los inversores que han diversificado sus carteras pueden estar mejor preparados para capear la tormenta causada por la caída de las acciones criptográficas. Enfatizando esto nuevamente, también vale la pena señalar que la caída de las acciones de criptomonedas no significa necesariamente que las criptomonedas en sí mismas sean inversiones inherentemente riesgosas. Si bien el criptomercado puede ser volátil, también ha experimentado un crecimiento significativo en los últimos años y se espera que continúe expandiéndose en los próximos años. Como tal, los inversores interesados en invertir en el criptomercado pueden considerar hacerlo a través de una cartera diversificada que incluya una variedad de activos diferentes.

También es importante que los inversores lleven a cabo una debida diligencia exhaustiva al seleccionar inversiones en el criptomercado. Esto incluye investigar los antecedentes y el historial de las empresas e individuos detrás de las inversiones y analizar las tendencias del mercado y los riesgos potenciales. Al adoptar un enfoque cuidadoso e informado para invertir en el criptomercado, los inversores pueden protegerse mejor de los cambios repentinos del mercado y las crisis como la experimentada por Silvergate Bank y la industria criptográfica en general.

Source: https://es.finance.yahoo.com/noticias/aprendido-bancos-crisis-silvergate-bank-070000997.html?guccounter=1

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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Silvergate Bank’s crisis: A wake-up call for risk management in crypto banking

Silvergate Bank’s crisis: A wake-up call for risk management in crypto banking

The cryptocurrency market has recently been shaken by a significant crisis at Silvergate Bank, a financial institution that specialises in digital assets. The effects of this crisis have been widespread and have caused a great deal of concern among investors. Shares of Silvergate Bank have experienced a sharp drop, hitting an all-time low of $4.86 on Friday, representing a decline of nearly 98% since the institution’s record high close in November 2021. As a result, the market capitalisation of Silvergate Bank has suffered a total loss of over $7 billion. The impact of this crisis has not been limited to Silvergate Bank alone. The wider crypto industry has also been affected, with major players such as Coinbase Global and Ebang International experiencing a noticeable drop of around 1% each. Additionally, even the popular cryptocurrencies Bitcoin and Ethereum have both taken a hit, experiencing a decline of roughly 4.8% over the past week.

The crisis at Silvergate Bank started when the bank delayed filing its annual report. The delay sparked a sell-off of Silvergate’s shares, triggering a domino effect across the crypto market. The situation worsened when Silvergate Bank announced that it had made a risk-based decision to discontinue the Silvergate Exchange Network, it’s crypto payments network. This caused Silvergate’s shares to tumble by nearly 50% on Thursday’s New York stock exchange. The fall in crypto stocks is a reminder that the crypto market is still highly volatile and susceptible to sudden shifts. The fact that one bank’s crisis can greatly impact the entire market is concerning. However, it is worth noting that this crisis does not necessarily indicate a fundamental flaw in the crypto market. Instead, it may be an indication that some players in the market, such as Silvergate Bank, were not adequately prepared for the risks associated with the market.

The Silvergate Bank incident highlighted some significant issues with the bank’s risk management and financial reporting approach. One of the key revelations from the crisis is that Silvergate’s bad debts were not its assets but its deposits. In simple terms, this means that Silvergate had been using its customers’ deposits to invest in risky assets rather than holding those deposits in more secure and stable investments. This is a major red flag for any bank, and it particularly concerns the context of a bank that focuses on digital assets and cryptocurrencies.

It has become evident that Silvergate, a financial institution dealing with digital assets, was not adequately prepared to handle the volatile market. As a result, their customers and investors have suffered significant losses. To avoid such situations, managing risk is critical to dealing with digital assets and cryptocurrencies. Banks must remain vigilant in identifying, assessing, and mitigating potential risks. There are several key areas that banks should consider in their risk management approach.

Firstly, banks should identify various risks of digital assets and cryptocurrencies, including market risks (such as price volatility), operational risks (such as security breaches), legal and regulatory risks (such as compliance with AML and KYC regulations), and reputational risks (such as negative publicity). Once risks have been identified, banks should assess the potential impact and likelihood of each risk. This approach will enable banks to prioritise risks and allocate resources accordingly. Banks should take steps to mitigate risks by implementing robust security measures, conducting due diligence on clients and counterparties, and diversifying their digital asset portfolios. Banks must monitor risks continually and adjust their risk management strategies accordingly. This may involve using risk metrics, conducting stress tests, and staying up-to-date on industry developments.

Alongside risk management, banks should also consider how to report their books when dealing with digital assets and cryptocurrencies. Banks need to accurately report their holdings and transactions in real time because the value of these assets can change rapidly. This may require specialised accounting software and the development of internal processes for tracking and reporting digital asset transactions. Moreover, banks may need to adapt their reporting practices to reflect the unique characteristics of digital assets and cryptocurrencies. For example, banks may need to report on the specific digital assets they hold and the particular risks associated with those assets. Banks may also need to provide more detailed disclosures about their digital asset holdings and transactions to ensure transparency with clients and regulators. Risk management and reporting practices are vital for banks that deal with digital assets and cryptocurrencies. Banks must proactively identify, assess, and mitigate risks while developing robust reporting practices that accurately reflect their digital asset holdings and transactions.

Ultimately, the Silvergate Bank crisis serves as a cautionary tale for banks and investors alike. It highlights the need for proper risk management, financial reporting, and diversification, particularly in the context of digital assets and cryptocurrencies. While the market for cryptocurrencies and digital assets remains volatile and unpredictable, those prepared to take the necessary precautions and invest wisely may still be able to succeed and grow in this exciting and rapidly-evolving industry.

In times of crisis, it is essential to remember the importance of diversification. Investors who have diversified their portfolios may be better able to weather the storm caused by the fall in crypto stocks. Emphasising this again, it is also worth noting that the fall of crypto stocks does not necessarily mean that cryptocurrencies themselves are inherently risky investments. While the crypto market can be volatile, it has also seen significant growth in recent years and is expected to continue expanding in the coming years. As such, investors interested in investing in the crypto market may want to consider doing so through a diversified portfolio that includes a range of different assets.

It is also important for investors to conduct thorough due diligence when selecting investments in the crypto market. This includes researching the background and track record of the companies and individuals behind the investments and analysing market trends and potential risks. By taking a careful and informed approach to investing in the crypto market, investors can better protect themselves from sudden market shifts and crises like the one experienced by Silvergate Bank and the broader crypto industry.

Source: https://www.benzinga.com/23/03/31239033/silvergate-banks-crisis-a-wake-up-call-for-risk-management-in-crypto-banking

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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How Can Decentralized Finance Survive the Current Crisis?

How Can Decentralized Finance Survive the Current Crisis?

Decentralized Finance (DeFi) has been in the spotlight lately, primarily because of the shocking collapse of the Terra ecosystem.  Its debacle cost tens of billions of dollars in a matter of days, creating violent shocks across the crypto market, and resulting in a loss of credibility among retail investors.  In 2021 DeFi provided investors with high rates of return, a too-good-to-miss opportunity. Now as Terra’s shock waves continue to bring down DeFi liquidity, investors are also considering their trust in crypto. One of the worst domino effects triggered by Terra came in the shape of Celsius, offering high-yielding interest accounts to 1.7 million users with $12 billion held. Now this crypto lending platform is currently rumored to be facing bankruptcy and has suspended user withdrawal requests to stabilize its operations.  To cap it all, the notable crypto hedge fund Three Arrows Capital is also facing an insolvency crisis. Clearly DeFi appears to be in trouble. But what has caused this current crisis, and why?

DeFi is an umbrella term for a set of financial activities that eliminate the need for intermediaries in traditional financial services. Loans, savings, remittances, insurance, and cryptocurrency transactions are all included. For example, some people will use DeFi to lend a friend $100 in Bitcoin, and as the lender they will earn interest on the loan without traditional intermediaries. As the FT explained DeFi is, “an umbrella term for a collection of crypto asset projects that aim to do away with a centralized intermediary — like a bank or an exchange — to provide financial services. They use DApps to execute common services like lending, savings accounts, and trading coins”. Before its collapse, Terra was considered a star product of DeFi, a payment network based on its TerraUSD stablecoin.

 

https://tva1.sinaimg.cn/large/e6c9d24ely1h3ic7wx6u2j20j40bvgmd.jpg

A skeptical view of the DeFi. Source: @ChainLinkGod.eth

Terra’s high interest bearing Anchor protocol was also supposed to resist the market downturn and be a tool for high profits whether in the bull or bear market.  But as Terra collapsed and tens of billions of dollars evaporated, those hopes were dashed. As Elizabeth Lopatto, deputy editor with The Verge explained, “Kwon’s rise and fall was fairly rapid, even by cryptocurrency standards. Luna emerged as a bright spot in the markets in December and reached its peak valuation, a touch over $116, in April; Luna was worth more than $40 billion, all told. During that time, a lot of crypto, including Bitcoin and Ethereum, was sliding. Luna’s popularity was due to a lending program, Anchor, that promised annual percentage yields (APY) of almost 20 percent — obscenely high.”

Over the past ten days, Celsius has prevented all of its estimated 500,000 users from withdrawing their money because of “extreme market conditions”. with no word on when it will be available again. As much as $8 billion in deposits is frozen. If that wasn’t enough it was reported that a week after the withdrawal freeze Celsius warned its community of a rise in fake social media accounts claiming to be from Celsius. At the same time, it paused its Twitter Spaces and AMA’s to focus on its liquidity crisis. “As has been a priority since our company’s inception, we maintain an open dialogue with regulators and officials. We plan to continue working with regulators and officials regarding this pause and our company’s determination to find a resolution,” a June 20th Celsius blog post confirmed. However, the comments to the blog post further underline how this has severely dented user trust. “I wonder how this is in the interest of the community when you didn’t ask them if they’d like to pause all chain activities. Everything you’ve said so far is lies and you will know that when the functions resume, I’d rather be in meme coin hype with 50/50 chances than this,” being typical of the overwhelmingly critical set of responses.

Hong Kong-based crypto lender Babel Finance paused withdrawals and redemptions, citing “unusual liquidity pressures”, while Singapore-based crypto hedge fund Three Arrows failed to meet margin calls from lenders. On Monday, another Hong Kong-based crypto exchange Hoo announced a halt on transactions after customer withdrawals became so great that they risked exhausting the company’s available funds, reported the FT.

In our view, problems with protocols like Terra don’t lie in the details of any one platform.  Because the current crisis was the result of a faulty model, Terra’s debacle was also fed by the belief that nothing like what has happened in the traditional finance world would ever happen in the blockchain market.  But the fact is that when you purposely remove the intermediaries which come with the traditional financial model, you also remove the safeguards that traditional finance has worked so hard to build over the past few decades, and especially after the 2007-08 credit crunch.

As it stands, DeFi is already in trouble.  According to data from DeFi Llama, the TVL of most top DeFi blockchains has dropped by 30% or more in the past month.  At the beginning of April, the total TVL (total value locked) of all blockchains was over $170 billion, and that number is now down to around $60 billion, which is a 65% decrease from before Terra crashed. “Moreover, since December 2021, the top smart contract platform tokens have lost 70% in value against the U.S. dollar as well, sliding from $823 billion to today’s $245 billion,” reported Jamie Redman in Bitcoin.com.

Some in the industry believe this change in the DeFi market capitalization is a tough but necessary step, as it will significantly reduce the emergence of risky projects and allow the industry to stabilize. However, others believe that the decline in TVL highlights deeper problems in DeFi that are not simple to solve.  And these current issues could prompt lawmakers to act sooner rather than later to create a series of more robust regulatory frameworks. An obvious example in the US is the recently tabled Responsible Financial Innovation Act which while not explicitly mentioned DeFi does seek to establish agency oversight and regulations according to which assets are securities.

As Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) continue to fall in value despite the efforts of bulls to shore up their value, making the cryptocurrency market more uncertain, there are some smart moves investors can deploy to prepare for more market volatility.  If you have funds on a DeFi platform, make sure you fully understand how the platform works and how it generates any rewards.  If you have moved all of your funds to a high-interest rate DeFi protocol, then please proceed with caution and think carefully about the consequences of a platform freeze or even crash, as this will be critical to the safety of your funds.

“While it’s far from certain the DeFi sector in its current form will fail, it’s likely to have more trouble before its problems are over.  The domino effect after the Terra crash is gradually playing itself out, and it remains difficult to predict how far it will spread.  If more major projects and institutions collapse however, it will no doubt impact on the wider crypto market. Already we’ve seen signs of this with FTX helping BlockFi with a $250 million loan, and crypto broker Voyager Digital with an even larger loan of $485 million.” Anndy Lian, Best Selling Book Author and Chief Digital Advisor to Mongolian Productivity Organization commented.

While we are all worrying that DeFi is heading downwards, we also need to remember that DeFi is created to eliminate banks and financial institutions as central intermediaries in various financial transactions. There is no stopping for DeFi. New projects are popping up during these bearish times. DeFi projects are still trying to innovate and do more.

Pollen for example, has started their second token sale and hopes to have its first index product launched by the end of the year. Pollen Virtual, a trading simulator that lets you create and manage virtual portfolios, is now on mainnet to give every trader — DeFi degen or crypto newcomer alike — a level playing field to test and showcase their trading capabilities, building reputation and earning PLN token rewards. Pollen COO William Vandyk explains:‘’The signals generated from Pollen Virtual are being used to build an Index Factory, constructing indices that anyone can buy which will hold real assets, their composition determined by collective intelligence and free from any fund management or performance fees”

Ledger is one of the most popular hardware wallets on the market are partnering with Alkemi Earn. They are integrated into Ledger Live’s Discover section. This is the first time a DeFi lending and borrowing app is available to Ledger users.

“DeFi continues to grow as we speak. Nothing is going to stop us.”

 

 

Original Source: https://www.benzinga.com/22/07/27979603/how-can-decentralized-finance-survive-the-current-crisis

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

j j j