RESOURCES | Research | Announcement

"Part of the service is the SEN leverage business, a series of secured loans collateralized by bitcoin. Risks to the unit are elevated by recent federal guidance on banks holding and lending against crypto assets and by regulatory reappraisals of such activity, which could lead to new negatives for Silvergate’s outlook.

“Silvergate’s situation is linked to the failure of FTX. After the crypto exchange’s collapse in November, the bank fell into hot water with legislators questioning how it failed to catch suspicious transactions between the exchange and its sister trading firm Alameda. Last week, FTX identified that $8.9 billion worth of customer funds were missing, largely due to loans made to Alameda. Silvergate held $1 billion in deposits from FTX at the time of the exchange’s collapse."

To assist financial institutions in identifying and managing their exposure to risks associated with bitcoin and other digital assets, CRB Monitor is expanding its publicly traded securities database to include coverage of securities issued by digital asset-related businesses (DARBs).

CRB Monitor has published a paper in support of this effort in the current edition of anti-money laundering policy journal ACAMS Today, titled Defining “Digital Asset-related Business”, which serves as the basis for our methodology for security identification and risk-based tiering in this complex and volatile investment space.

A reprint of the paper can be downloaded here.

Here is an excerpt:

“Regardless of an institution’s policy toward digital assets themselves or the ecosystem of businesses surrounding digital assets, poorly-constructed policies and procedures are a risk to any effective compliance program. Although regulated institutions are encouraged to take a risk based approach in assessing individual customer relationships... many continue to take the simplistic “just say no” or risky “do not ask, do not tell” approach toward this industry. As a result, these institutions (a) have a limited understanding of digital assets and DARBs; (b) have not clearly defined “digital asset-related business”; and (c) therefore have nonexistent, unclear or incomplete policies and procedures, which can lead to inconsistent interpretation and implementation.”

The CRB Monitor database provides coverage of almost 1,200 DARBs. Silvergate Capital was included in our coverage up to its closure two weeks ago.

The addition of DARBs to the CRB Monitor securities database features proprietary risk- monitoring resources, including:

●  Proprietary industry-linked risk tiers
●  Inclusion and risk tier rationale
●  Primary, secondary and tertiary exchange listings and tickers
●  CUSIP/ISIN/CINS code*
●  Coverage of digital asset-related ETPs and market indexes
●  DARB industry-linked sector classification
●  Pure play/non-pure play designation
●  Complete source documentation

The year-long project of researching companies’ links to this high-risk market has created what we believe will become the “gold standard” in identification and risk classification of DARBs and a tool that will maximize institutions’ ability to identify and manage exposures in an ever- changing, risky investment environment.

*Requires CUSIP Global Services subscription

CRB Monitor tracks almost 1,200 publicly traded businesses globally which have a connection to Digital Assets (DARBs). We categorize companies using our proprietary risk tier framework and sector classification system. In addition, CRB Monitor unravels and maintains complex corporate structures, linking publicly traded parent companies to their underlying operational subsidiaries. Custodian banks, broker/dealers, and asset managers find our data essential for pre-trade compliance, risk management, index construction and portfolio analytics.

Interested financial services professionals are encouraged to contact CRB Monitor at info@crbmontor.com or at (844) 672-3282.