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 bank’s operations and voluntarily liquidate the company’s assets. The news follows significant financial troubles the bank faced, and the firm’s stock plummeted in value.
Details of Silvergate’s Wind Down and Liquidation Plan
Over the last six months, Silvergate Capital Corporation’s (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 firm’s Silvergate Exchange Network payment platform.
“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 company’s press release detailed. “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,” Silvergate’s statement added.
Silvergate’s 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 bank’s stock was downgraded by banking giant JPMorgan. In the filing, Silvergate mentioned its “ability to continue as a going concern,” 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.