Silvergate Bank will wind down operations and undergo liquidation, according to a March 8 press release from its holdings company, Silvergate Capital.
Silvergate to shut down bank
Silvergate said that bank operations will be halted in accordance with regulations.
It said that this course of action will involve a full repayment of all deposits. It also said that it is exploring how it can resolve claims and ensure the continued residual value of assets such as proprietary technology and tax assets.
The company said that it made this decision in light of “recent industry and regulatory developments” without naming any specific events.
Silvergate did not state whether it will submit a bankruptcy filing.
Silvergate previously announced that it would halt its Silvergate Exchange Network (SEN) while ensuring that other services continue to operate. It reiterated today that its other deposit-related services will remain active during the wind-down process.
Silvergate crisis began with SEC filing
On March 3, Silvergate submitted an SEC filing stating that it would file a late 10-K report.
In that filing, the company also said that it faced inquiries from regulators such as the U.S. Department of Justice (DOJ). That investigation may concern Silvergate’s relationship with FTX, as reported in February, though the filing does not state this outright.
Several major crypto companies stopped using Silvergate’s services shortly after the filing (and shortly before the company announced that it would halt its SEN service). Many of those companies began to use the competing Signature Bank.
Mainstream media previously reported that Silvergate was discussing recovery plans with the FDIC, while the White House publicly stated that it was aware of the situation. It is unclear whether other regulators and government bodies will become involved.
Silvergate’s stock has been on a downward trend throughout the affair. The value of Silvergate (SI) is down 5.76% today and down 63% since March 1.
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