- Silvergate Bank decides to liquidate its assets and close shop
- The bank claims to repay the deposits in full
The cryptocurrency market is seeing another player close. Silvergate Bank, the troubled crypto-focused bank, has decided to cease operations and liquidate its assets. In an announcement made today, Silvergate Capital Corporation — the bank’s parent company — said 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 of Silvergate Bank (“Bank”), today announced its intention to wind down operations and voluntarily liquidate the Bank at in an orderly manner and in accordance with applicable regulatory processes.”
Silvergate Bank insures deposit repayment
Notably, the company has assured “full refund of all deposits” and deposit-oriented services will continue to operate. In addition, the company has appointed Centerview Partners LLC as financial advisor, while Cravath, Swaine & Moore LLP will assume the position of legal advisor. 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 shut down Silvergate Exchange Network (SEN). In addition, the bank recently faced an exodus with most of its high-profile crypto clients ceasing 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. Moreover, it had expressed concerns about the continuation of business operations as current affairs, which immediately caused the share price to drop in the market.
The crypto-focused bank had also made headlines in terms of regulation. According to a Bloomberg report, the company was in talks with the Federal Deposit Insurance Corp (FDIC). The discussion included ways to increase liquidity, and FDIC was reportedly examining its books.
In particular, the collapse of yet another cryptocurrency player has not had much effect on the crypto market at the time of writing. However, Silvergate Capital (SI) stock has taken a dip in the after-hours market. SI’s stock value was down more than 33% at the time of going to press, according to data presented on CNBC. SI was trading at $3.28 after hours as it closed at $4.91.