The company claimed that the bank’s voluntary liquidation is its best path forward due to recent industry and regulatory developments.
The parent company of Silvergate Bank, known to many in the space as one of the major crypto banks, has announced plans to “wind down operations” and liquidate the bank.
In a March 8 announcement, Silvergate Capital Corporation said the decision to shutter operations was “in light of recent industry and regulatory developments.” According to the company, the Silvergate Bank liquidation plan included “full repayment of all deposits”.
Many crypto firms, including Coinbase, Paxos, Gemini, BitStamp and Galaxy Digital, announced in March they would cut ties to the bank following an investigation into Silvergate’s alleged involvement in the collapse of FTX. The bank said it would be closing its exchange network on March 3, claiming the termination was a “risk-based decision.“
UPDATE: Employees at Silvergate $SI have been told to prepare for liquidation and shutdown imminently.
**Source: “we’ve been told that an orderly liquidation will be announced and our charter will be handed over to the FDIC.”
**employees have been given their WARN Act… https://t.co/2v15gcjMHQ
— Andrew (@AP_Abacus) March 8, 2023
Silvergate was one of the major banking partners for many crypto firms, but drew concerns about its solvency following an announcement it would delay the filing of its annual 10-K report by two weeks. The document typically provides an overview of a company’s financial situation.
Related: White House ‘aware’ of the Silvergate situation, says spokeswoman
With the future absence of Silvergate, it’s unclear what the impact will be on other crypto firms with funds tied to the bank or otherwise exposed. The bank reported that the transfer volume of consumer fiat deposits drop roughly $50 billion in the third quarter of 2022 compared to that over the same period in 2021.