- Silvergate Bank decided to liquidate its assets and close up shop
- The bank claims it will repay the deposits in full
The cryptocurrency market sees another player go out of business. 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 the “Company”) (NYSE:SI), the holding company for Silvergate Bank (“the Bank”), today announced its intention to cease operations and voluntarily liquidate the Bank in due course and in accordance with applicable regulatory processes.’
Silvergate Bank guarantees the payment of deposits
It should be noted that the firm guarantees “full repayment of all deposits” and deposit-focused services will continue to operate. In addition, the company has appointed Centerview Partners LLC as financial advisor, while Cravath, Swaine & Moore LLP will act as legal advisor. The press release also states,
“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 just after the bank announced its decision to terminate the Silvergate Exchange Network (SEN). What’s more, the bank recently faced an outflow, with most of its high-profile crypto clients abandoning its services. The customer list it included Gemini, Coinbase, Circle, Paxos and many more.
The bank’s woes have doubled since its recent report was released SEC Filing. The filing said the company would delay publishing its annual report. In addition, it expressed concern about continuing business operations as a going concern, which immediately saw its stock price hit the market.
The crypto-focused bank has also hit regulatory headlines. A report from Bloomberg said the firm is in talks with the Federal Deposit Insurance Corporation (FDIC). The discussion included ways to increase its liquidity, and the FDIC was reportedly examining its books.
It should be noted that the collapse of yet another cryptocentric player has not had much of an effect on the crypto market at press time. However, shares of Silvergate Capital ( SI ) saw a sharp decline in the after-hours market. SI shares were down more than 33% at press time, according to data presented to CNBC. SI traded at $3.28 after hours before closing at $4.91.
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