As a U.S. regulated money transmission and electronic stored value company, Circle’s top priority is the protection of reserve funds backing USDC. As a result of ongoing uncertainty at Silvergate Bank, today Circle has moved the small percentage of USDC reserve deposits held at Silvergate to our other banking partners. This process of winding down our relationship with Silvergate began last year, as signs of trouble and broader crypto asset risk exposure became increasingly apparent.
All USDC reserves are held in several well-capitalized U.S. banks, and in the Circle Reserve Fund, which currently comprises approximately 80% of USDC reserves and provides daily reporting. Since 2018, the sum of these reserves have been reviewed and attested to monthly by a third-party auditor, with the January 2023 attestation now available on Circle’s website.
Certain services that Silvergate Bank previously provided to the broader digital assets market have been suspended by Silvergate. This includes Silvergate’s Exchange Network (SEN), which a small number of Circle customers had used. Historically, this service provided a payment transfer network into Silvergate.
Circle’s customer service, operations, risk management and finance teams have already notified remaining Silvergate dependent customers of alternative options. Although Silvergate has indicated that its deposit related services remain unaffected, Circle is actively working to migrate any remaining services with Silvergate Bank.
