Failed crypto bank Silvergate is exploring ways to recover with US regulators, according to a Bloomberg report on March 7.
Officials have visited Silvergate’s headquarters
Bloomberg reported that Federal Deposit Insurance Corp (FDIC) officials visited Silvergate’s headquarters in California last week with permission from the Federal Reserve.
Silvergate still hasn’t decided how to deal with its financial problems, which began last week. However, the crypto-friendly bank may seek investment from elsewhere in the cryptocurrency industry to regain liquidity, according to the report.
Bloomberg also said that despite the FDIC’s involvement, the bank may be able to recover without further involvement with regulators.
Neither Silvergate nor the FDIC has commented publicly on the matter. Instead, Bloomberg cited a number of sources familiar with the company.
Why Silvergate is at risk of failure
On March 1, Silvergate filed a statement with the SEC to report a late 10-K filing.
That filing further revealed that Silvergate is facing inquiries from regulators, including the Department of Justice (DOJ). These inquiries are likely related to Silvergate’s role in the collapse of FTX and Alameda Research last year, as reported in the February.
Silvergate also said in its filing that it assesses its ability to “continue as a going concern,” leading many to worry about its stability.
Shares of Silvergate ( SI ) fell sharply in the days following its SEC filing. As of March 7, shares were trading at $5.21, down more than 61% from $13.53 on March 1.
Several crypto companies have downloaded from Silvergate services while others report minimal exposure to the firm. Over the weekend, Silvergate announced that it will shut down its Silvergate Exchange Network (SEN) while leaving other services open.
The White House said on March 6 that it did aware with The Silvergate situation. He noted that the bank is one of many struggling crypto firms, but declined to comment specifically.
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