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Crypto-focused Silvergate Bank to shut down operations

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Crypto-focused Silvergate Bank to shut down operations

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  • Silvergate Bank decides to liquidate its assets and close shop
  • The bank claims it will make full repayment on deposits

The cryptocurrency market sees another player close business. Silvergate Bank, the troubled crypto-focused bank, has decided to cease operations and liquidate its assets. In an announcement made today, Silvergate Captial Corporation – the parent company of the bank – stated that the decision was influenced by “recent industry and regulatory developments.” The press release said,

“Silvergate Capital Corporation (“Silvergate” or “Company”) (NYSE:SI), the holding company for Silvergate Bank (“Bank”), today announced its intent to wind down operations and voluntarily liquidate the Bank in an orderly manner and in accordance with applicable regulatory processes.”

Silvergate Bank assures repayment on deposits

Notably, the firm has assured “full repayment of all deposits” and deposit-focused services will continue to be operational. Additionally, the company has appointed Centerview Partners LLC as the financial advisor, while Cravath, Swaine & Moore LLP will take up the legal advisor position. The press release also stated,

“The Company is also considering how best to resolve claims and preserve the residual value of its assets, including its proprietary technology and tax assets.”

The development comes right after the bank announced its decision to discontinue Silvergate Exchange Network (SEN). Moreover, the bank faced an exodus recently with most of its high-profile crypto clients dropping its services. The client list included Gemini, Coinbase, Circle, Paxos, and many more.

The bank’s misfortune doubled after the release of its recent SEC filing. The filing stated that the company would delay the publication of its annual report. In addition, it had raised concerns about continuing business operations as going concerns, which instantly saw its share price tank in the market.

The crypto-focused bank had also hit headlines in the regulatory sphere. A report by Bloomberg stated that the firm was in talks with the Federal Deposit Insurance Corp (FDIC). The discussion included ways to boost its liquidity, and FDIC was reportedly examining its books.

Notably, the collapse of yet another crypto-centric player has not had much effect on the crypto market at press time. However, the share of Silvergate Capital (SI) has taken a plunge in the after-hours market. The share value of SI was down by over 33% at press time, according to data presented on CNBC. SI was trading at $3.28 after hours, while it had closed at $4.91.

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Priya is a freelance cryptocurrency writer at AMBCrypto. A student in business administration, Priya focuses on the latest developments in the cryptocurrency and blockchain technology space.
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