Silvergate Bank Announces Voluntary Liquidation as Crypto Industry Woes Persist
At 4:30 p.m. Eastern Time, Silvergate Bank announced its intention to wind down the crypto-friendly bankâs operations and voluntarily liquidate the companyâs assets. The news follows significant financial troubles the bank faced, and the firmâs stock plummeted in value.
Details of Silvergateâs Wind Down and Liquidation Plan
Over the last six months, Silvergate Capital Corporationâs (NYSE: SI) stock dropped 94.82% against the U.S. dollar as the company faced significant financial troubles tied to its exposure to the now-defunct crypto exchange FTX. On Wednesday, March 8, 2023, the company announced it was winding down operations and plans to liquidate the bank. Four days ago, Silvergate discontinued the firmâs Silvergate Exchange Network payment platform.
âIn 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,â the companyâs press release detailed. âThe bankâs 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,â Silvergateâs statement added.
Silvergateâs stock closed Wednesday at $4.91 per share after the stock shed 40.99% in USD value over the last five days. Last week, it told the U.S. Securities and Exchange Commission (SEC) that it had to delay its annual fiscal earnings report, and the bankâs stock was downgraded by banking giant JPMorgan. In the filing, Silvergate mentioned its âability to continue as a going concern,â and it also noted that it faced regulatory scrutiny from U.S. officials. After the stock downgrade, large crypto firms such as Circle, Crypto.com, Gemini, Paxos, and Coinbase distanced themselves from the crypto-friendly bank.
What impact will the voluntary liquidation of Silvergate Bank have on the broader cryptocurrency industry? Share your thoughts about this subject in the comments section below.