Silvergate, the US bank known for linking the financial and cryptocurrency worlds, shut down last week after suffering record losses. The bank gave several African fintech before it went under solutions that supported global banking and dollar-based remittances. These startups are currently looking for new partners while their customers wait.
Among the numerous former African customers of Silvergate who now need to find alternative banking partners are Payday, Grey, and Vella. While they’re at it, a number of their customers have complained on social media about their deposits getting stranded with these startups.
Banking is halted
It has been difficult for Payday, a startup in remittance and payments, to handle user dollars as they come in. According to those with knowledge of the situation, the company is working hard to seal another relationship that will enable it to keep providing its users with services.
“I’ve been waiting for my pay for about two weeks. Simply said, it is annoying. My Silvergate account has expired, according to Payday, and the pay will be refunded. They also provided me with instructions on how to open a new USD account. Yet neither the reversal nor the new account are functioning at the moment. Nothing is functioning. Femi*, a Payday customer, said, “I am now forced to rely on my savings.
Grey, a fintech business that facilitates global digital banking, has a similar tale to tell. Grey anticipates that it would take until March 21 before all USD account features are restored for users, according to an email issued to the company’s clients. Customers’ EUR and GBP accounts are unaffected in the interim.
Conclusion
The bank made sure that depositors’ money was completely paid out, which is the bright side of Silvergate’s closure. This indicates that the FTX saga, which cost firms like Chipper Cash and Nestcoin important runway cash, will not be repeated for the affected fintechs and crypto companies in Africa. An interruption in financial services is the key issue here. International money services should restart later this month, as some of the impacted businesses have pledged.
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