Silvergate Bank Announces Voluntary Liquidation as Crypto Industry Woes Persist
At 4:30 pm ET, Silvergate Bank announced its intention to wind down the crypto-friendly bank’s operations and voluntarily liquidate the company’s assets. The news followed the bank’s financial troubles, and the firm’s stock plummeted.
Details of the Silvergate Closure and Liquidation Plan
Over the past six months Silvergate Capital Corporation (NYSE: AND) fell 94.82% against the US dollar as the company ran into significant financial troubles related to its exposure to the now defunct cryptocurrency exchange FTX. On Wednesday, March 8, 2023, the company announced the termination of operations and plans to liquidate the bank. Four days ago, Silvergate stopped supporting the Silvergate Exchange Network payment platform.
“In light of recent industry and regulatory developments, Silvergate believes that a planned bank closure and voluntary liquidation of the bank is the best way forward,” the company said in a statement. Press release detailed. “The plan for closing and liquidating the bank provides for the full repayment of all deposits. The Company is also considering how best to resolve claims and preserve the residual value of its assets, including proprietary technology and tax assets,” Silvergate said in a statement.
Silvergate shares closed on Wednesday at $4.91 per share after shares lost 40.99% in dollar terms over the past five days. Last week, he told the US Securities and Exchange Commission (SEC) that he had to postpone his annual income statement and the bank’s stock was downgraded by banking giant JPMorgan. In a statement, Silvergate referred to its “ability to continue operations for the foreseeable future” and also noted that it faced regulatory scrutiny from US officials. Since the stock downgrade, major crypto firms such as Circle, Crypto.com, Gemini, Paxos, and Coinbase have distanced themselves from the crypto-friendly bank.
What impact will the voluntary liquidation of Silvergate Bank have on the cryptocurrency industry as a whole? Share your thoughts on this in the comments section below.
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