Crypto Bank Silvergate Capital Corporation Announces Intent to Wind Down Operations

Twitter icon  •  Published vor 1 Jahr  •  Hassan Maishera

Crypto-friendly bank Silvergate has announced the voluntary liquidation of its assets and is also winding down its operations.

TLDR;

  • Crypto-friendly Silvergate Bank announced that it would voluntarily liquidate its assets and wind down operations.
  • The wind-down and liquidation plan includes full repayment of all deposits, the bank added. 
  • Silvergate’s struggles are tied to its heavy exposure to the recently collapsed FTX cryptocurrency exchange.

Silvergate To Liquidate Its Assets

Silvergate Capital Corporation, the parent company of the Silvergage bank, announced via a press release on Wednesday that it would wind down operations and voluntarily liquidate the Bank in an orderly manner and in accordance with applicable regulatory processes.

This latest development comes as the bank has struggled following its exposure to the recently collapsed FTX cryptocurrency exchange. In its press release, the company wrote;

“In light of recent industry and regulatory developments, Silvergate believes that an orderly wind-down of Bank operations and a voluntary liquidation of the Bank is the best path forward. The Bank’s wind-down and liquidation plan includes full repayment of all deposits. 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 Silvergate Bank added that it also decided to discontinue the Silvergate Exchange Network (SEN), which it announced on March 3, 2023, on its public website. The company said the various deposit-related services remain operational as the Company works through the wind-down process. 

Regarding the liquidation, Silvergate said it had tapped Centerview Partners LLC to serve as a financial advisor, Cravath, Swaine & Moore LLP as a legal advisor and Strategic Risk Associates to provide transition project management assistance.

While commenting on this latest development, Senate Banking Committee Chairman Sherrod Brown (D-Ohio) said; 

"As the impact of FTX’s collapse continues to ripple outward, today we are seeing what can happen when a bank is overreliant on a risky, volatile sector like cryptocurrencies. I’ve been concerned that when banks get involved with crypto, it spreads risk across the financial system, and it will be taxpayers and consumers who pay the price. That’s why I am continuing to work with my colleagues in Congress and financial regulators to establish strong safeguards for our financial system from the risks of crypto.”

FTX was one of the world’s leading cryptocurrency exchanges prior to its collapse in November 2022. FTX’s collapse has had numerous impacts in the crypto space, as numerous companies have been affected.

Author

Hassan Maishera

Hassan is a Nigeria-based financial content creator that has invested in many different blockchain projects, including Bitcoin, Ether, Stellar Lumens, Cardano, VeChain and Solana. He currently works as a financial markets and cryptocurrency writer and has contributed to a large number of the leading FX, stock and cryptocurrency blogs in the world.